Report Contents

April 6, 2021



BY Teneo Macro

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Turkey could introduce new measures against the president’s critics. Political fragmentation will define Peru’s upcoming presidential election. In Germany, the race for the Merkel succession is heating up. South Korea’s ruling party could face a political defeat in two mayoral elections. Meanwhile, China’s ByteDance has challenged an Indian court decision to freeze its local bank accounts, the Netherlands’ caretaker PM is under pressure, Ecuador’s presidential run-off will be held, and Benin’s president is expected to be re-elected.



The debate around “vaccine passports” is picking up across developed economies as vaccine rollouts progress. The UK government is considering the introduction of Covid-19 certificates for the reopening of its economy in coming weeks; however, this possibility is opposed by around 40 MPs within the ruling Conservative Party. The general public seems to be widely supportive of these digital certificates, especially for travel purposes and frontline workers. Moreover, most Britons do not believe that these certificates would be discriminatory or would suppose an infringement on personal freedoms. Meanwhile, EU countries are also considering the introduction of the so-called digital green certificate to speed up the return to travel; these certificates would potentially replace quarantines and test-requirements. However, the failure of contract tracing apps across rich democracies in recent months is a reminder of the limits of tech-driven solutions to combat the pandemic.




A cabinet meeting scheduled for 3pm (local time) today could sanction new security measures aimed at cracking down on dissent. Earlier, President Tayyip Erdogan deemed a declaration on the Montreux convention by retired officers as a “coup attempt.” An open letter signed by 104 former senior Navy officers warned that the proposed “Istanbul canal” – Erdogan’s costly pet project – could harm Turkey’s security by invalidating an 85-year-old international treaty designed to prevent militarization of the Black Sea. The episode has sparked a major controversy in a country still shaken by the failed 2016 coup attempt. Ten retired admirals were detained on 5 April on charges of conspiring against state security and the constitutional order.


If the polls are to be believed, any of five candidates could finish in the top two in the 11 April first round of the presidential election; a further two could still be in with a chance if they can engineer a late surge in support over the next few days. According to an Ipsos poll undertaken on 31 March, only 3.5 points separate poll leader Yonhy Lescano from fifth-placed Keiko Fujimori. An IEP poll conducted on 1-2 April has just 2.5 points separating the top five. The free-market economist Hernando de Soto appears to have the most momentum; both Ipsos and IEP have him rising to second, seemingly at the expense of the ultra-conservative Rafael Lopez Aliaga. The congressional elections taking place on the same day are subject to the same political fragmentation, with up to 12 parties possibly gaining representation.


Both contenders for the Merkel succession have confirmed their participation in an offsite meeting of the CDU/CSU alliance’s Bundestag group on 11 April. The performances of CDU leader Armin Laschet and CSU chief Markus Soeder could provide a better idea of who ends up running for Merkel’s bloc in September. Historically, if both party leaders cannot agree on a negotiated solution, the joint CDU/CSU Bundestag group has held a vote on the candidacy. But regardless of who runs, a coalition government with the Greens remains the base case.

South Korea

President Moon Jae-in could be facing a major political defeat in mayoral elections in Seoul and Busan on Wednesday, 7 April, as polls show that candidates from the opposition People Power Party (PPP) enjoy clear leads in both races. Moon’s approval ratings have plummeted following recent revelations of insider land deals by housing officials intending to profit from the Moon administration’s housing plans. Voters appear poised to use Wednesday’s vote as a referendum on the national Democratic Party of Korea-led administration. Defeat could mark the beginning of Moon’s lame-duck period as competition ramps up for next year’s presidential election.





Indian foreign minister S Jaishankar is in Tajikistan’s capital to attend the 9th Heart of Asia-Istanbul Process (HoA-IP) ministerial conference on 29-30 March. As Pakistan foreign minister Shah Mahmood Qureshi will also attend, there is speculation the two might speak to each other on the sidelines, though neither side has asked for an official meeting. Their last formal meeting was in Nepal in 2016. India-Pakistan relations could be emerging from a deep freeze with the recent revival of a cease fire agreement on the border and the resumption of talks on river waters.


The United Malays National Organization (UMNO), which had dominated Malaysian politics from independence until its defeat in 2018, will run independently of its current coalition partners in the next elections. Party members made the decision at its annual general meeting held during the weekend. UMNO, which vies for the Malay vote, is tied as the second largest party in parliament and its decision to run independently makes the outcome of the next vote highly uncertain.


President Rodrigo Duterte may decide by Monday evening in Manila whether to extend beyond Easter the movement restrictions imposed over the weekend. The strict movement controls – formally called the enhanced community quarantine (ECQ) — covers Metro Manila and its surrounding provinces, a combined area that accounts for roughly 40% of the country’s GDP. Daily new cases are at their highest since the start of the pandemic and the positivity rate has also spiked; many hospitals are also overflowing with cases, forcing them to use outdoor tents.


The National People’s Congress may vote later this week on the country’s next set of leaders. The choices were decided at the Communist Party congress in late January, with party insider Pham Minh Chinh set to become the country’s next prime minister. Chinh will likely focus on administrative reforms to reduce bottlenecks in the government, especially at the provincial level. Current Prime Minister Nguyen Xuan Phuc will become state president. Hanoi party secretary Vuong Dinh Hue will be the next head of the legislature.




The ruling center-right Citizens for European Development of Bulgaria (GERB) is expected to win the 4 April parliamentary elections but will struggle to form a coalition government. An expectedly more fragmented parliament will open multiple post-election scenarios, of which the most plausible is a minority and technocratic cabinet tasked to lead the country through the pandemic.


Almost a month-long government crisis is getting closer to resolution after Prime Minister Igor Matovic (OLaNO) has agreed to swap positions with the Minister of Finance Eduard Heger (OLaNO). All four coalition parties have already expressed support for Heger, and he is expected to be formally approved by parliament later this week. The distribution of portfolios within the government is expected to remain unchanged, but some new ministerial appointments are likely. Overall, a compromise agreement bodes well for political stability, although disagreements between Matovic and other coalition members could persist.


The cabinet is meeting today to discuss new Covid-19 restrictions due to a marked spike in virus cases. Turkey recorded 30,021 new cases on 27 March – the highest number since the start of the year. Meanwhile, a cabinet reshuffle, which could sanction the splitting of some ministries (including the Treasury and Finance ministry), remains on the political agenda.




Tension should peak this week regarding the future of foreign minister Ernesto Araujo. His dismissal has become the epicenter of a new executive-congressional crisis. Araujo has been singled out as the one to blame for delays in Covid-19 vaccine and active ingredient (API) purchases due to an undiplomatic approach to China. He is currently the main exponent of the far right Olavista faction of the Bolsonaro administration, supported unconditionally by the president of the House foreign relations committee Eduardo Bolsonaro, the youngest of the president’s three politician sons. Over the weekend the minister tweeted that Congress wants to take him out because he is against “giving the 5G to China”, which has been interpreted by many as his last message aimed at Bolsonaro supporters before leaving office.



Cote d’Ivoire

On 31 March, the International Criminal Court (ICC) is set to deliver its judgment in the appeal of the prosecutor against the acquittal of former president Laurent Gbagbo and his co-defendant Charles Ble Goude. In January 2019, the ICC had acquitted both Gbagbo and Ble Goude from all charges of crimes against humanity allegedly committed in the context of the 2010/11 post-electoral crisis during which some 3,000 people were killed. Should the court confirm the acquittal, this would clear a main hurdle for both defendants to return to Cote d’Ivoire. Nevertheless, this would still be subject to negotiations with the government as both have been sentenced by Ivorian courts in absentia.


Palma, the northern town closest to Mozambique’s landmark Afungi LNG development, has come under attack by insurgents. The attack appeared to target expatriates at a local hotel that has come under siege; at least seven people were reportedly killed when a convoy attempted to break out of the compound. Just days after announcing a resumption of operations, Total has been forced to announce another suspension of work on its USD 20bn LNG development project. Any delays to the 12.9mn mt/year LNG project, which was expected to come onstream in 2024/25, represent a major downside risk to the sovereign outlook.


The government expects to resume virtual talks with the International Monetary Fund (IMF) on 30 March. A previous round of talks had ended inconclusively on 3 March. Both sides are under pressure to avoid admitting defeat, particularly as Zambia is one of the first countries to seek debt treatment under the G20’s ‘Common Framework for Debt Treatment beyond the DSSI’. However, Zambia’s political fundamentals remain a crucial obstacle to a deal ahead of the 12 August elections.

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