Emerging markets brace for 2019
January 2, 2019 -- Latin America’s two biggest economies start 2019 with new populist presidents while six other emerging market economies face elections which could further dampen investor confidence.
More than 600 million Indian voters are expected to elect their next government between April and May in the world’s largest democracy -- a referendum on Prime Minister Narendra Modi and his Hindu nationalist government’s policies. Modi’s Bharatiya Janata Party faces the risk of a coalition government which could derail his economic reforms.
Indonesia’s President Joko Widodo faces a rematch with his rival Prabowo Subianto. Jokowi appears to have turned the tide against a rising wave of Muslim extremism, but he has nationalised oil, gas firms and mines previously owned by foreign companies to bolster his populist credentials.
With South Africa’s economy in tatters and its youth frustrated, voters will decide in May whether to give the African National Congress (ANC) another term. President Cyril Ramaphosa and the ANC have distanced themselves from the Jacob Zuma–era corruption scams, but need to win a significant majority to push forward market-friendly reforms such as revamping debt-laden state companies by retrenching workers or selling assets.
In 2015, Argentina’s President Mauricio Macri tapped into voter frustration over public corruption and rising crime. Now Macri is on the defensive after he sought a record $56 billion IMF bailout amid the collapse of the economy.