February 2015 Political Situation Report Surprise win in Sri Lanka is also building a $272 million railway project to the south of the country. th On 8 January a political earthquake occurred in Sri Lanka when the President of ten years standing, Mahinda Rajapaksa, lost the presidential election. It was all the more galling for the now former President because he was defeated by one of his closest allies – or so he thought. The common opposition candidate, Health Minister and General Secretary of the ruling Sri Lanka Freedom Party (SLFP), Maithripala Sirisena, announced that he was crossing the floor and standing against the President the day after the presidential election was called in November, two years early. The background to this political coup is still unclear, but our sources suggest that former President Chandrika Bandaranaike Kumaratunga was the mastermind, aided and abetted by opposition United National Party leader, Ranil Wickremesinghe and, possibly, the Indians. Rajapaksa is credited with bringing the 30 year long civil war to an end in 2009. However, the final months of the campaign, when the United Nations believes as many as 40,000 civilians may have been killed, were deeply controversial. Rajapaksa, first elected in 2005, installed his two brothers, Gotabhaya and Basil, as Cabinet ministers covering defence and economic development respectively. Between them the three brothers ran the government. Another brother, Chamal Rajapaksa, looked after parliament as its Speaker. As the West turned increasingly hostile over the failure to allow investigations into the end of the civil war, the brothers turned to China. China was quick to fill the vacuum left by the West. They provided the investment and know-how for a new port and airport in Hambantota in the south of the country which is also the Rajapaksa home turf. The Chinese also built a new National Theatre, a four lane expressway between Katunayake (the country’s main international airport) and Colombo, the commercial capital. The Chinese were instrumental in building the E02 expressway which provides an outer ring road to Colombo, as well as the E01 Colombo to Matara expressway (161 kms) which has cut the journey time from Colombo to the deep south from five or six hours to just one and a half hours. Chinese funding Having secured their position as the largest investors in Sri Lanka, the Chinese went on to build the Colombo South Container Terminal, in which they have a controlling stake through the state-run China Merchant Holdings. However, the largest project of all is the new $1.5 billion Colombo Port City project which was started last September and will be built on reclaimed land next to the existing docks. Of course all of this investment makes sense because Sri Lanka is strategically positioned as a pivotal part of China’s plans for a Maritime Silk Route (MSR). But India has always considered Sri Lanka to be part of its sphere of influence. Rivalry between China and India runs deep despite all the diplomatic talk and the Indians were less than pleased when Chinese submarines docked twice in Colombo last September. The suggestion then that India may have been behind some of the planning for the political coup is not far-fetched. Over ten years President Rajapaksa had also belittled and trivialised Ranil Wickremesinghe. Wickremesinghe has a sharp political brain, is an astute lawyer and was instrumental in delivering economic reforms in his brief period in office between 2002 and 2004. Sirisena crossed the floor, standing as the National Democratic Front candidate with the support of the UNP, the main Muslim party, the Sri Lankan Muslim Congress (SLMC) and the main Tamil party, the Tamil National Alliance (TNA) and he also took a sizeable chunk of the SLFP parliamentary party with him. The stage was set for a close election. In Sri Lanka the incumbent uses the state media and state resources to maximum advantage. It hardly creates a level playing field but it is the recognised way. So the victory by Maithripala Sirisena was all the more impressive. Two days after the election the new President was sworn in and Ranil Wickremesinghe became Prime Minister. Sirisena’s manifesto talked about a 100 day programme, in which he would reduce the powers of the Executive Presidency, put the executive role in the hands of the Cabinet and parliament and bring in sweeping democratic reforms. Sirisena has started well. He has invited exiled dissidents to return to Sri Lanka and has given orders to stop all censorship of dissident websites. He has put an end to phone tapping, surveillance of journalists and politicians and is preparing legislation for a right to information law. Although the TNA has decided not to join the President’s Cabinet, they are supporting from outside and will have been pleased to see the Northern Province Governor (most Tamils live in the north and east of the country), a former army Major-General, sacked and replaced by H.M.G.S. Palihakkara, a diplomat who served on the internal Truth Commission. th Getting a parliamentary majority for his ‘19 Amendment’ to the constitution might have proven difficult, but President Sirisena saw more SLFPers cross the floor after the election. Then the party Central Committee agreed to hand over the party’s leadership to the new President after Rajapaksa stood down. If he is true to his word, then there will be legislation to establish strengthened and independent institutions, including a Judicial Services Commission, a Police Commission, a Public Service Commission, an Elections Commission, a Commission against Bribery and Corruption and a Human Rights Commission. At the end of the 100 days the new President will call a general election. That could be interesting because he will be leading the SLFP whilst his current ally, UNP leader Ranil Wickremesinghe, who is enacting much of the programme through a UNP dominated Cabinet, will be standing against the SLFP. Despite the uncertainty of the general election all of the processes appear to be in place to truly democratise Sri Lanka and its institutions. It is a little early to judge, but the omens suggest that this country could be the next big opportunity for massive and sustained foreign direct investment (beyond the Chinese that is!). Whilst Sri Lanka was making a move away from autocracy in Zimbabwe, the 35 year long regime of President Robert Mugabe looks as though it is unravelling. st th On 21 February Mugabe will be 91. On 14 December 2014 he went on holiday and was due to th return on 15 January. He stayed away for a further week, apparently because his wife, Grace, had appendicitis whilst they were in Singapore (he goes there for regular, but undisclosed, medical treatment). He would have good reason for staying away from his home country. In 2014 the President himself, almost certainly urged on by Grace Mugabe, dismissed his Vice-President Joice Mujuru after a prolonged campaign against her. Inevitably, such a high profile figure had allies within the government and within a short period a further 16 Ministers and Deputy Ministers were dismissed. Their crime was supposed to be a failure to deliver according to expectation and in Mujuru’s case she was accused of plotting against the President. What is clear is that the aging President is in poor health and is losing his ability to control factions within his party. The sniff of a succession on the horizon sent the Comrades into a frenzy of plotting and jostling for position, which resulted in the December Congress of the ruling ZANU-PF. The winner was a man known as the Crocodile, Emmerson Mnangagwa, who became the First VicePresident. He is now in front place to succeed Mugabe. But to get there, Mnangagwa, Grace Mugabe (who has Presidential ambitions of her own) and their allies had to make sure that Mujuru and her allies were completely side-lined. Didymus Mutasa, a former close aide to the President and Minister of State for Presidential Affairs until mid-December, was also dismissed. He decided to fight the decision and sent a letter to the President and the SADC outlining the failings of the December Congress and his disappointment in the Comrade President for failing to handle ‘internal contradictions’ within the ZANU-PF. Didymus Mutasa says that he is still the legitimate ZANU-PF secretary for administration, but his fate appeared to be sealed when President Mugabe appointed Grace Mugabe to a disciplinary panel tasked with reviewing Mutasa’s case. The internal battles in ZANU-PF could well lead to a factional split in the near future. However, so far Mugabe has failed to spread his purge of perceived disloyals to the armed forces. Augustine Chihuri, the current Commissioner General of the Zimbabwe Republic Police, is said to be a Mujuru supporter along with senior people in the Central Intelligence Organisation (CIO). The Zimbabwe Defence Forces (ZDF) heads are thought to favour Vice-President Mnangagwa. The very fact that these issues are being aired, almost as though Mugabe is already a yesterday’s man, is telling. Hopefully the armed forces will not be obliged to take sides. The country could not take further conflict. The real trouble is that the political infighting and succession scramble in the ruling party has meant that the economy has been ignored. The unemployment rate is running at something between 60% (ZANU-PF Manifesto 2013) and 85% (MDC figures). An estimated 11 million out of a population of 12.7 million have no access to medical aid and 98% of drugs are funded by international donors. Economic growth, which peaked at 5.7% in 2009 under the National Unity Government, dropped to 4.5% in 2013 and will be around 3.1% in 2014. FDI has fallen from $167 million in Q1 2013 to less than $65 million in Q1 2014. The Reserve Bank of Zimbabwe says that exports were down 13% in the first half of 2014 compared with the same period in 2013. Abroad it should have been a better time for President Mugabe. He is due to be elected the Chairman of the African Union (AU) at the end of January. Whilst this is unlikely to be challenged, it does create a problem for the AU because Mugabe is excluded from travelling to the EU and America. It may also create problems with international meetings such as the G20 and G7. In Zambia, President Mugabe arrived early for the inauguration of Edgar Lungu as President, even before the count had been concluded. He was greeted by a large crowd of Zambians saying “Mugabe Must Go”. The anticipated passing of Robert Mugabe may leave a bitter taste for Zimbabweans; impoverished, out of work and with deep divisions in the ruling classes. In Venezuela the great man died in 2013. The new leader, Nicolás Maduro, has struggled to juggle the books (or his colleagues in government) like the old master. To be fair, the train has been coming off the rails for years and it is mainly the drop in oil prices that has scuppered the Venezuelan government. A whopping 95% of the government’s hard currency income comes from oil exports. So when the price of Venezuelan oil fell from $96 a barrel last September, to $38 a barrel today, it is little wonder that the economy tumbled further. Venezuela’s government budget anticipated a price of $117.50 a barrel. The fall in oil prices has affected a number of oil producing countries, but in most of them the governments had sensibly put some money away for such a rainy day; not so in Venezuela where they spent the money on expensive and seemingly ineffective social programmes and they have the lowest foreign exchange reserves of the main oil exporters. Poverty has dropped from 50% in 1998 to 30% in 2012 according to the World Bank, but remains stubbornly high considering the largesse of previous governments. Gross Domestic Product (GDP) contracted by 3% in 2014 and inflation rose to more than 60%. No wonder then that Venezuelans spend most of their time queuing for basic goods at supermarkets. People are rationed to three items and can only attend supermarkets on certain days of the week. The situation is now so bad that soldiers patrol the lines of people to check that they are not trying to cheat the system. If that isn’t bad enough, hospitals are cancelling operations for lack of basic medical supplies and people are reported to have died because they could not get the pharmaceuticals they needed to stay alive. Internationally, there are concerns that Venezuela will default on its debt. Moody’s credit rating agency has downgraded Venezuela to such a level that it clearly expects the country to go bankrupt or default, although the President says that they won’t default. In January, President Maduro went on a global tour to try and get fellow oil producers to reduce the flow of oil to bring up the cost per barrel. Without the support of Saudi Arabia, that was always going to be a lost project. He went on to visit China, Russia, Iran, and Qatar in the hope of raising some additional funds. Although the President came back saying that he had obtained $20 billion from the Chinese and further billions from Qatar – neither country confirmed the details. Meanwhile, first Leamsy Salazar, the head of security details for former President Hugo Chávez and then the Speaker of the Venezuelan Parliament, Diosdado Cabello, defected to the United States in December 2014. It seems Cabello is prepared to tell all about the involvement of the Venezuelan government and military, through the Soles cartel, in the drugs trade. According to a report on the ABC news website, around 90% of Colombian drugs pass through Venezuela. Sometime later this year, probably in September, there will be a general election for the 165 seats to the National Assembly. With an opposition that finally looks as though it is uniting and support ebbing away for the Chavez revolution as the queues grow longer, anything now looks possible. We have to hope that the people are prepared to wait until September. Past Elections Uzbekistan – Legislative – 4th January There was a slight shuffling of the chairs in Uzbekistan as it undertook its general election. There are only four approved parties and they all support the President. th The 4 January election was a second round in 22 seats out of the total of 135 elected seats in the Legislative Chamber. The Liberal Democratic Party of Uzbekistan (UzLiDeP) won 52 seats in total, which was down one seat, whilst the Milliy Tiklanish Democratic Party of Uzbekistan took an additional five seats, to take their tally to 36 seats. Edgar Lungu the Minister of Defence and Justice and former Secretary General of the ruling Patriotic Front (PF) won, but only by the narrowest of margins; he took 48.33% of the vote and 807,925 votes. His closest rival, Hakainde Hichilema of the United Party for National Development (UPND), took 46.67% of the vote and 780,168 votes. Turnout was a very low 32.36% of the vote. The People’s Democratic Party of Uzbekistan (NDPU) dropped five seats to 27 seats and the Adolat Social-Democratic Party of Uzbekistan won 20 seats, just one seat up on the 2009/10 election. The Ecological Movement held its congress and elected a further 15 legislators to fill its quota in the 150 seat parliament. th th On 13 /14 January the Senate was also elected. 84 Senators were elected by the Supreme Council and local government bodies, with a further 16 being appointed by President Islam Karimov. Since pretty much all relevant powers are in the hands of the President and the parties are largely compliant, this election will see little change in the policy direction of the country. th President Lungu has moved quickly to establish his new Cabinet, which does not include former VicePresident and acting President Dr. Guy Scott. The new President has promised a new constitution, but has just 17 months in office before he will have to face the voters once more, as the presidential term runs out. Of more concern is the state of the economy, but with such a short period before fresh elections the new President is more likely to give hand-outs than seek to control spending or expand the economy. Comoros – Legislative – 25th January The election in Comoros was due to be held in December 2014, but was put back to 25th January by President Ikililou Dhoinine on 25th October. Sri Lanka – President – 8 January The common opposition candidate, Maithripala Sirisena, surprised everyone by winning this election with 51.28% of the vote or 6,217,162 votes. The party of the former President, Ahmed Abdallah Sambi, the Juwa Party, is reported to have done well, although no full results were available at the time of writing. Incumbent President, Mahinda Rajapaksa took 47.58% of the vote and 5,768,090 votes. There will, in any case, be a second round runoff in some constituencies on 22nd February. See the main article for more on this story. Greece – Legislative – 25th January Croatia – President (R2) – 11th January The second surprise win of the New Year took place in Croatia, when Kolinda Grabar-Kitarović, the candidate of the centre-right Croatian Democratic Union (HDZ), won the second round runoff with 50.74% of the vote. Incumbent President, Ivo Josipović, although standing as an Independent, had the backing of the ruling centre-left Social Democratic Party of Croatia. He took 49.26% of the vote in what was a nail-biting finish. The left-wing anti-austerity Coalition of the Radical Left (SYRIZA) won 149 of the 300 seats in the Hellenic Parliament in an expected win; or rather, they won 99 seats (+28) but, as the largest party, received a further 50 seats. Alexis Tsipras, their leader, was sworn in as Prime Minister and he announced his Cabinet the next day, after forming an alliance with the Independent Greeks (AEL) which won 13 seats (-7). The former ruling party, New Democracy (ND,) did well in that it dropped just 1.85% since 2012 and lost just three seats (or 53 seats because they were the largest party in 2012) to take 76 seats. Zambia – President – 20th January This election was, in effect, a by-election caused by the death of incumbent President Michael Sata in October last year. The new Prime Minister has announced that there will be no Greek default on its debt, but he has appointed a tough anti-austerity Finance Minister in the form of Yanis Varoufakis (53). If you have an interest in where Greece is likely to go in the future then check out his blog http://yanisvaroufakis.eu/essays/ Mani Ahmad; African Democratic Congress (ADC) The Prime Minister, in his first Cabinet meeting, has already introduced a number of hand-outs, has stopped redundancies in the public sector and put a hold on privatisation plans. Muhammadu Buhari; All Progressives Congress (APC)        Rufus Salawu; Alliance for Democracy (AD) Sam Eke; Citizens Popular Party (CPP) Alexis Tsipras     Martin Onovo; National Conscience Party (NCP) Age: 40 Religion: None (Atheist) Status: Partner with two children Education: Degree in Civil Engineering and MPhil in Urban and Regional Planning Profession: Civil Engineer Hobbies: Avid football fan Political career: Joined Communist Youth of Greece in late 1980s Member of Athens Municipality 2006 2009 elected to Hellenic Parliament 2009 leader of SYRIZA th Prime Minister of Greece 25 January 2015 Tunde Anifowose-Kelani; Accord Alliance (AA) However, the real battle is between incumbent President Goodluck Jonathan of the People's Democratic Party (PDP) and Muhammadu Buhari of the All Progressives Congress (APC). An Afrobarometer survey carried out in late December suggests that the election between the two men and their parties is neck and neck. A Gallup poll suggests that the President’s approval rating has fallen from 43% in 2011 to just 35% in late 2014. The Afrobarometer poll puts the figures at 49% in 2012 and 40% in December 2014. Equally there is little confidence in government, with Gallup saying that confidence in government has dropped from 55% in 2011 to 29% in December 2014. Forthcoming Elections th Nigeria – President and Legislative – 14 February This is a big election, with 68,833,476 voters voting for a President, the 109 seat Senate, or upper house, and the 360 seat House of Representatives, or lower house. There are 14 candidates standing for the Presidential election, they are: Allagoa Chinedu; Peoples Party of Nigeria (PPN) Ambrose Owuru; Hope Party (HOPE) Ayeni Adebayo; African Peoples Alliance (APA) Chekwas Okorie; United Progressive Party (UPP) Comfort Sonaiya; KOWA Party (KOWA) Ganiyu Galadima; Allied Congress Party of Nigeria (ACPN) Godson Okoye; United Democratic Party (UDP) Goodluck Jonathan; People's Democratic Party (PDP) The Afrobarometer survey asked people who they expected would win; 40% said the PDP and 38% said the APC. The poll suggested that the APC were ahead in the North-West, South-West and NorthEast, whilst the PDP were ahead in the South, SouthEast and North-Central. You can find the full Afrobarometer report which contains many more statistics about feelings on democracy and government performance at http://allafrica.com/download/resource/main/main/idat cs/00091134:b7716bd8e3924beb3cfde4a46e41dcdc. pdf By way of reminder, in 2011 Goodluck Jonathan won the presidential election with 58.89% of the vote. His centre-right PDP, which has won every election since 1999, took 203 of the 360 seats in the House of Representatives. The Action Congress of Nigeria (ACN) won 69 seats, the Congress for Progressive Change (CPC) won 38 seats and the All Nigeria People’s Party (ANPP) won 28 seats. There were five other parties who won fewer than ten seats. The centre-left All People’s Congress (APC) was formed in February 2013 as a merger of the Action Congress of Nigeria (ACN), the Congress for Progressive Change (CPC), the All Nigeria Peoples Party (ANPP) - and a faction of the All Progressives Grand Alliance (APGA). Since then, they have seen five Governors switch to their party from the ruling party (they hold 14 of the 36 governorships), as well as a number of PDP legislators. Going in to the 2015 election, the APC holds 172 seats to the PDP’s 171 seats in the lower house. The APC has the greatest chance of ending the PDP’s rule of Nigeria, but they will find things tough, with one of their strongholds being the North-East where Boko Haram is active and where many voters may be disenfranchised as a result of the conflict. nd Comoros – Legislative – 22 February This is the second round runoff date for those constituencies where there wasn’t a clear majority. At the time of writing it was still unclear how many seats might be affected. See ‘Past Elections’ above. th Lesotho – Legislative – 28 February Prime Minister Tom Thabane tried to prorogue parliament last year and ended up facing what looked remarkably like an attempted coup d’etat. Following the intervention of the Southern African Development Community (SADC), in the guise of the South Africans, a compromise general election was agreed. There are 120 seats in the National Assembly of Lesotho and currently the Prime Minister’s All Basotho Convention (ABC) holds 30 of them. However, they are not the largest party, that privilege goes to the Democratic Congress (DC) of Pakalitha Mosisili which holds 48 seats. The Democratic Congress is a breakaway group of the former ruling Lesotho Congress for Democracy (LCD) and fought its first election in 2012. The LCD came third in the 2012 election with 26 seats. A further nine parties took between one and five seats. After the 2012 election, Tom Thabane was able to form a coalition with the LCD, Basotho National Party BNP – 5 seats), Popular Front for Democracy (PFD – 3 seats) and the Marematlou Freedom Party (MFP – 1 seat). Of the 120 members of the National Assembly, 80 are elected in single-member constituencies and 40 by proportional representation in a single nationwide constituency using party lists. There are 20 registered political parties and around 1.1 million eligible voters. We have now downgraded the Lebanese th presidential election because it is now into its 19 th round, which is due to take place on 18 February – but don’t hold your breath with the current political state of the country. In India, the Delhi Legislative Assembly election for th all 70 seats will be held on 7 February. The state has been under presidential rule for more than a year, after the Aam Aadmi Party (AAP), leader Arvind Kejriwal, stood down as Chief Minister. Although the BJP had won the 2013 election with 34 seats, they were unable to form a government and eventually the AAP with 28 seats and the Indian National Congress (INC) with 8 seats joined a coalition government until it all fell apart. Latest opinion polls by ABP NewsNielsen give the AAP 50% of the vote with the BJP on 41% and Congress just 9%. In Germany the City State of Hamburg will vote for a th new parliament on 15 February. In the 2011 election the Social Democratic Party (SPD) won 48.4% of the vote and 62 of the 121 seats. The latest polls put them on 44%. In second place last time was the Christian Democratic Union (CDU) with 28 seats and 21.9%, whereas this time they are polling at 20%. The Free Democrats (FDP) who took nine seats and 6.7% of the poll, but who had a very bad year last year, are polling on 5%, just enough to get them representation. If that happens, they will be hoping that they have turned the corner on their fortunes. The Greens are on 13%, up from 11.2% last time and 14 seats. Immigration has been a burning issue in eastern Germany and, as a result, the Alternative for Germany (AfD) has been doing well. In 2014 they won representation in three eastern state parliaments. In Hamburg they look like taking 7%, which would give them their first representation in a western state. Noteworthy Political Events Fourteen countries introduced new or substantially changed Cabinets in November:       Afghanistan – six months after presidential election. At least four minister nominees have been rejected by Parliament Bolivia – after presidential election Brazil – As Dilma Rousseff is sworn in for a second term Greece – after snap general election Haiti – after political crisis, country now ruled by presidential decree Madagascar – to replace underperforming ministers         Mali – to replace underperforming ministers Mozambique – after elections Seychelles - routine Somalia – twice this month as first Cabinet was rejected by Parliament Sri Lanka – after presidential election Tanzania – following corruption scandal Tunisia – after election, but then withdrawn after it was clear the PM would lose confidence vote Zambia – after presidential by-election Following continued political crisis in Yemen, the Cabinet and President have resigned leaving government in crisis. Ministerial changes: There were ministerial changes in Bahamas, Canada, Chile, Gambia, Georgia, Iceland, Italy, Maldives, Morocco, Paraguay, Saudi Arabia, South Korea and South Sudan due to sackings, resignations, government reorganisation or deaths. About Political Situation Report (PSR) Each month we take you through the most significant political events of the past month and look at forthcoming events. These reports are factual and accurate to the best of our knowledge and they are available to anyone who visits our website at Trade Bridge Consultants or requests copies of PSR. For our clients we provide more detailed briefings giving our interpretation on these events and their possible impact on business. TBC Website The Trade Bridge Consultants website (www.tradebridgeconsultants.com) now contains over 6,000 posts and 210 pages of unique information. On each Country page (196 countries) we include information about the political history of the country, facts about its key political parties (including links to their websites), recent election results, past news items, links to government portals and other key websites. Where we are able to obtain them, we provide the manifestos of those parties publishing online, as well as major speeches, budgets and State of the Nation speeches. Each month we add more biographies of key political figures and aim to keep up to date with Ministerial changes. Disclaimer This newsletter should not be regarded as a recommendation to buy, sell, or otherwise maintain any particular investment or take any particular course of action. In all cases readers should check all details and seek further advice before taking any actions. All rights reserved. No part of this publication may be reproduced in any form without the prior permission of the publisher, Trade Bridge Consultants. 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