The new year first brings a geopolitically important election in Taiwan. The incumbent party’s win could mean continuing tensions in the Taiwan Strait.
The popularity of the current leaders in India, Indonesia and Mexico lends support to policy continuity. In Indonesia, all three candidates have claimed that they will continue with President Joko Widodo’s (Jokowi) investment friendly policies. In India, recent Bharatiya Janata party (BJP) wins in state elections have strengthened Prime Minister Narendra Modi’s bid to extend his reign for a third term.
Mexico’s leading candidate is the current President’s protégé. Questions remain whether she will strictly follow President Andres Manuel Lopez Obrador's (AMLO) policy path. South Africa’s population will also vote next year on whether the ruling African National Congress (ANC) party will remain in power amid crumbling economic conditions.
In Romania, the rise of the far-right party will be closely watched in Europe.
Taiwan
Taiwan’s election is scheduled for 13 January 2024. The current Vice President Lai Chingte is the presidential candidate from the incumbent Democratic Progressive Party (DPP). The opposition parties Kuomintang (KMT) and Taiwan People’s Party (TPP) tried to form a joint ticket but could not come to an agreement. The election will therefore be a three-way race.
KMT is more friendly with China and a DPP win would likely mean that the cross-strait tensions will remain. DPP’s Vice President candidate, Hsiao Bi-khim, was Taiwan’s representative to the US until recently. Her candidacy underscores the importance of Taiwan’s relationships with the US and China. The latest polls suggest that DPP’s Lai-Hsiao ticket is leading with 31% support, but the race remains a close call.
Indonesia
Indonesia will hold its elections on 14 February 2024. After two terms, President Joko Widodo, who remains very popular, cannot run another term.
There are three candidates. One is Prabowo Subianto, the current Minister of Defence, a three-time presidential candidate and a military strongman in the past. His candidacy has been boosted by having Jokowi’s son as his running mate, even without a clear verbal support from Jokowi as his party offers another candidate, Ganjar Pranowo. Prabowo is currently leading in the poll at 39% compared to Ganjar’s 30%.
The entrance of Jokowi’s son into the election tickets suggest that President Jokowi has exerted his influence into the political system by creating a new political dynasty. Indonesia has been governed by a couple of families since independence, and Jokowi has essentially created a new one. All candidates have suggested that they will continue with Jokowi’s policies.
India
India will hold its general elections around April/May of next year. India recently held state elections in four states. Prime Minister Modi’s Bharatiya Janata party won three out of the four state elections. The state-level victory has strengthened PM Modi’s bid for another term at the upcoming general elections where he is expected to run the campaign on policy continuity.
PM Modi’s approval rating has been consistently high, with the latest figure at 76% according to Morning Consult Surveys, the highest among global leaders. PM Modi’s win would give him a chance to continue to implement structural reforms to facilitate foreign investment, which has been eager to enter India to take advantage of the domestic market as well as to diversify away from China.
Mexico
Mexico is scheduled to hold presidential and general elections on 2 June 2024. The candidate from President AMLO’s Morena party is the former Mexico City Mayor Claudia Sheinbaum. Her main opponent is Xochitl Galvez from the opposition alliance. President AMLO has retained high approval rating over 60% over his time in office. His support for Sheinbaum has therefore led to a wide lead in the polls. In the latest one, Sheinbaum has 52% support, compared to Galvez’s 25%.
What is important to watch is whether Sheinbaum will strictly follow President AMLO’s policy. Two important areas will be on the energy sector and climate change. He has favoured Mexico’s state-owned companies’ traditional energy sector at the expense of private companies’ investment in renewables. This has created tensions across North American countries and has come to the forefront given Sheinbaum’s background as a climate scientist.
Mexico needs more investment in the energy sector to facilitate the nearshoring boom. We could say that nearshoring has happened despite AMLO’s unfriendly investment policy. If there are positive changes on that front, Mexico’s growth potential could be lifted over the medium term.
South Africa
In South Africa, the general elections are scheduled to happen between May and August. South Africa has faced deteriorating economic performance and institutional quality over the last few years. It is now mired with frequent power cuts and has the highest unemployment rate among major economies.
The election will likely become a vote of approval for the ruling African National Congress party (ANC), which has governed South Africa since 1994. Support for ANC has fallen over time and is now at 45% in the latest polls. The support dropped to 40% during the worst power cuts in April this year. The largest opposition party, Democratic Alliance, trails at 31%. ANC’s loss of majority could mean a coalition government.
Romania
The last emerging markets election in 2024 will happen in Romania in November when both parliamentary and presidential terms end. The current coalition’s recent decision to increase (and reform) pensions could be seen as part of the pre-election spending as offset measures to keep the fiscal deficit in check have not been confirmed.
The latest polls suggest that the current ruling coalition (social democrats and liberals) would fall slightly short of an outright majority and it is possible that the far-right party could gain ground. But November is still a year away and a lot could happen before then.
Mali Chivakul is an emerging markets economist at J. Safra Sarasin Sustainable Asset Management. The views expressed above should not be taken as investment advice.