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from Expert Zone:
The resurrection of Congress
(This piece comes from Project Syndicate. The opinions expressed are the author's own)
The overwhelming victory of the Indian National Congress in elections in the important southern state of Karnataka in early May has shaken up the country's political scene. India's troubled ruling party had appeared headed downhill in the build-up to the next general elections, which must be held by May 2014. Now, following its huge win in Karnataka, all bets are off.
Karnataka (whose capital, Bangalore, is a symbol of India’s thriving software and business-process-outsourcing industries) had been ruled for the previous five years by the Bharatiya Janata Party, the country’s main opposition party, which governed India from 1998 to 2004. The BJP’s victory in the state in 2008 was hailed as a milestone in its effort to position itself as a natural party of government. Support for the BJP in Karnataka, with its affluent, well-educated voters and its significant Christian and Muslim minority populations, was widely depicted as evidence that the party - usually identified with Hindu chauvinism and an electoral base concentrated in Hindi-speaking northern states - could broaden its appeal beyond its traditional constituencies.
As the Congress-led national government (of which I am a member) reeled under a series of political and financial scandals, the BJP increasingly sought to position itself as the obvious national alternative. India’s hyperactive media began to celebrate the ambitions of the BJP’s most visible leader, Narendra Modi, chief minister of the western state of Gujarat, who has assiduously presented himself as an avatar of effective government, in contrast to the controversy-ridden establishment in New Delhi. The BJP, however, proceeded to paralyze Parliament with unruly calls for the government to resign.
from Breakingviews:
Polls give strife-hit Pakistan a shot at stability
By Andy Mukherjee
(The author is a Reuters Breakingviews columnist. The opinions expressed are his own)
Pakistan’s election may just give the troubled country a shot at stability. Investors will discount much of the hyperbole from political parties about the economic possibilities ahead. The question is whether the poll - the first proper democratic transfer of power in Pakistan’s history - can provide stable, effective leadership that keeps the army out of politics while uniting the country in dealing with Taliban-sponsored sectarian violence.
from Breakingviews:
India’s bickering lawmakers test investors’ faith
By Andy Mukherjee
(The author is a Reuters Breakingviews columnist. The opinions expressed are his own)
The $12 billion foreign investors have poured into Indian equities this year is not a gift: it’s a bet that Finance Minister Palaniappan Chidambaram will keep his promise to lift the country’s GDP growth from its 10-year low. But the government can’t deliver without lawmakers doing their part. The problem is that India’s national parliament, never a bastion of efficiency, has simply stopped working.
from Breakingviews:
Malaysia poll offers only short-term relief
By Andy Mukherjee
(The author is a Reuters Breakingviews columnist. The opinions expressed are his own)
Malaysia’s ruling coalition has narrowly survived a strong challenge to its 56-year-old rule. While the results of the country’s general election on May 5 came as a relief for investors, the poll showed a widening racial divide. That doesn’t portend well for the economy.
from Hugo Dixon:
Hugo Dixon: How to respond to UKIP’s surge
By Hugo Dixon
(Hugo Dixon is Editor-at-Large, Reuters News. The opinions expressed are his own.)
The UK Independence Party will not come close to winning Britain’s next general election. The populist anti-Europe, anti-immigration party may not even win a single seat, despite last week’s surge in English local elections where it won nearly a quarter of the vote - running a close third to Labour and the Conservatives. That’s how the maths of Britain’s first-past-the-post voting system works.
from MacroScope:
ECB poised to act … modestly
It’s European Central Bank day and we have it on very good authority that a quarter-point interest rate cut is on the cards, which will take rates to a record low 0.5 percent. A plunge in euro zone inflation to 1.2 percent, way below the target of close to but below 2 percent, has cemented the case for action.
In terms of reviving the euro zone economy this is pea shooter and elephant territory. The ECB has consistently diagnosed the key problem that already ultra-low interest rates are not transmitted to high debt corners of the euro zone, where lending rates are much higher and credit restricted. A rate cut won’t change that. It also illuminates the gulf in approach with the Bank of Japan and Federal Reserve who continue to print money at a furious rate.
from Breakingviews:
Unsure voters could dim lure of Malaysian assets
By Andy Mukherjee
(The author is a Reuters Breakingviews columnist. The opinions expressed are his own)
Malaysia’s upcoming general election looks set to be a close-run affair. The big risk for investors from the May 5 poll is that neither of the two competing coalitions - the ruling Barisan Nasional or the opposition Pakatan Rakyat - may be able to claim a decisive victory.
from Hugo Dixon:
Italy could do with market pressure
Italy could do with some market pressure. Rome’s bond yields are now lower than they were before February’s inconclusive election. But as the politicians scheme, the economy burns. With markets calm, there is insufficient urgency to crack on with long-needed economic and political reform.
The fall in 10-year bond yields, which were 4.3 percent on Friday compared to 4.4 percent just before the election, is attributable to two factors. First, nobody wants to bet against the European Central Bank which has promised to do whatever it takes to preserve the euro. Second, the Japanese central bank’s pledge to buy gigantic quantities of bonds at home has buoyed asset prices elsewhere, including in Italy.
from India Insight:
Narendra Modi’s media blitz fraught with risk
(This commentary reflects the thoughts of the author. It does not reflect anyone else’s opinion, and does not necessarily reflect the views of Thomson Reuters Corp.)
During Gujarat's elections last year, incumbent Chief Minister Narendra Modi used 3D technology to appear at more than one political rally simultaneously. Now re-elected, the man has increased his omnipresence, if such a thing is possible, with help from the media.
from India Insight:
Narendra Modi and Rahul Gandhi: The burden of perception
(Any opinions expressed here are those of the author and not necessarily of Reuters)
Rahul Gandhi and Narendra Modi might find that fighting each other over who will be India's next prime minister is easier than fighting the perceptions of more than a billion of their countrymen about who the candidates really are.
