here - Trade Bridge Consultants

February 2015
Political Situation Report
Surprise win in Sri Lanka
is also building a $272 million railway project to the
south of the country.
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
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
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
Two days after the election the new President was
sworn in and Ranil Wickremesinghe became Prime
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
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
On 21 February Mugabe will be 91. On 14
December 2014 he went on holiday and was due to
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
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
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
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
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
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
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
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
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
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.
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.
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.
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
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
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
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
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
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
Prime Minister of Greece 25 January
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
Forthcoming Elections
Nigeria – President and Legislative – 14
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
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
Godson Okoye; United Democratic Party (UDP)
Goodluck Jonathan; People's Democratic Party
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
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
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.
Comoros – Legislative – 22
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.
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
presidential election because it is now into its 19
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
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
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
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
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
( 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.
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
Phone: +44 (0)20 8487 1192
E-mail: [email protected]
© Trade Bridge Consultants 2014