Choose Your Investments Wisely!January 10, 2024
Cadiz Fund NewsJanuary 17, 2024
An Article By Ian Kilbride published on 10 January 2024.
“Democracy is the worst form of government, except for all the others.” Winston Churchill’s famous quote faces its severest test in 2024. For the first time in history, this year, half of the world’s population across 50 countries will go to the polls and cast their ballots to elect their next government. This alone is an endorsement of Churchill’s maxim, but even more powerful is that in a recent survey of 36, 000 people across 30 countries, 80 percent of respondents stated that they wished to live in a democracy.
It’s unfair to say that some elections don’t count, or don’t matter. But, for example, the electoral preferences of the 11,000 inhabitants of Tuvalu won’t move any needles, although their concerns are global in nature as a small island state threatened by rising oceans. Size is not the defining criterion, however, as the outcome of the January election in Taiwan could tilt the country closer a catastrophic conflict with mainland China, or present an opportunity to reset the increasingly dangerous and high stakes stand-off between the two.
Other elections such as those to be held in Russia, Bangladesh, Iran, Venezuela and North Korea are authoritarian ‘democracies’ in which elections give the lie to their democratic claims and pretensions. While the conduct and outcome of these facsimile democracies is pre-ordained, it is far from clear whether elections will take place this year in war torn and occupied Ukraine.
Not so with the US, India, EU, UK, Indonesian and of course, South African elections. Frankly, these count and their conduct and outcome will have an impact beyond their borders.
The world’s most populous democracy, India, will go the polls sometime between April and May this year, and the country’s 900 million registered voters are likely to re-elect Narendra Modi’s Bharatiya Janata Party for a third term. While Modi has come under severe criticism for playing on nationalist sentiment, placing pressure on democratic institutions and narrowing the scope for freedom of expression, the Indian economy has been a stellar performer and the country’s influence on the global stage is rising. Meanwhile, India’s arch nemesis, Pakistan, will go the polls in February, all while former Prime Minister Imran Khan languishes in prison. Also, in February, Indonesia will trump India by holding the biggest single day of voting when the country’s electorate votes for a president and some 20,000 parliamentary, provincial and district representatives.
What then of the US, UK and South African elections?
The closest we can some to an electoral racing certainty is a Labour Party victory in the UK elections to be held in the second half of the year. Enjoying some 41 percent of popular support, Labour now enjoys a massive lead over the Conservatives, languishing with a mere 24 percent. While the Liberal Democrats have risen to 13 percent, the UK’s first-past-the-post electoral system means that Labour’s victory will not be as large as its popularity, but we are still likely to see King Charles lll inviting Sir Keir Starmer to form a government before the end of the year.
A couple of ponderables make forecasting the November 2024 US elections challenging. The first, obviously, is the Trump factor. While the states of Virginia and Maine have banned Trump from being on the ballot paper, it is likely that the US Supreme Court will overturn these prohibitions, clearing the way for the 45th President to run again to become the 47th. Despite his obvious mental and physical frailty, President Biden has vowed to run for re-election, ostensibly driven by a desire to keep the ‘world’s most dangerous President’ (as the Economist termed Trump) out of the White House. Interestingly, those unreliable polls have Trump beating Biden in a number of important electoral states, but racing neck and neck overall.
If the US election is perplexing, the South African elections in May are even more complex. The only clear trend is a significant decline in support for the ruling African National Congress. All opinion polls place the ANC under the required 50 percent threshold required to form a government, with some seeing it plummeting below 40 percent. This is fanciful. The more realistic scenario is that the ANC will scrape an absolute majority, or secure sufficient support to easily forge a coalition with one or two smaller parties.
However, the opposition ‘moonshot’ pact may wrest control of Gauteng from the ANC and KZN is also within sight, depending how the ANC vote fractures. So, while Cyril Ramaphosa is likely to be sworn in as State President for the third time by mid-year, from mid-2024, the country’s three major provinces could be run by the opposition. Now that’s an interesting prospect.