Past and Future Elections: A Prognosis
In the ever-changing landscape of global politics, elections serve as crucial moments that can shape the future of nations and have significant implications for businesses, trade, and economic stability. To comprehend the direction of the world and anticipate the potential impact on various industries, it is important to reflect on past elections and look ahead to the future. This article delves into past and upcoming elections in key regions and offers a prognosis of what lies ahead.
Past Elections: Reflecting on the Impact
Let's first reflect on some notable past elections and their consequences for business and the economy:
Brexit and UK Elections: The UK's decision to leave the EU through the 2016 Brexit referendum had significant consequences. The 2019 general election, won by Boris Johnson's Conservative Party, played a key role in shaping post-Brexit trade policies and the economic landscape. Boris Johnson received praise for delivering on Brexit but faced criticism for potential economic repercussions. The UK's economy has faced more significant challenges compared to its peers, with the UK being the only major wealthy economy that has not fully recovered to pre-pandemic levels, which Brexit may have contributed to. The Office for Budget Responsibility predicts that the UK will ultimately be 4% worse off due to Brexit, although many voters were motivated by sovereignty rather than economic factors. Several unresolved issues remain, including the Northern Ireland protocol, permanent arrangements for sectors like financial services, fishing, and electric vehicle parts, as well as cooperation on science and reducing bureaucratic hurdles. Realising potential benefits from these issues requires both political and economic strategies.
United States Presidential Election 2020: Joe Biden's 2020 presidency brought expectations of an economic policy shift with increased government spending in infrastructure, healthcare, and climate initiatives. Notably, the "American Jobs Plan" and healthcare measures aimed to stimulate economic growth and address long-standing issues. This shift has positively impacted Renewable energy, Healthcare, and Construction sectors. Politician reviews vary, with President Biden receiving praise for addressing critical issues and bolstering the economy.
Opposition leaders have expressed fiscal concerns, while industry leaders generally welcome the increased government support for fostering growth and job opportunities.
Germany Federal Election 2021: The end of Angela Merkel's 16-year tenure as Chancellor marked a significant turning point in German politics, with potential policy changes in areas like energy transition and carbon reduction. Merkel was known for her stable and pragmatic leadership, with a focus on climate policies and the energy transition. The election ushered in a coalition government, and potential policy changes include more ambitious carbon reduction targets and a shift towards green technologies. Reviews of key politicians, including the coalition leader, the Minister of Environment and Energy, opposition leaders, and industry experts, will shape public perception of the new government's ability to address these critical issues and steer Germany's future.
France Presidential Election 2022: Frederic Leroux, the head of the cross-asset team at French fund manager Carmignac, anticipates that Emmanuel Macron’s clear victory is likely to reassure markets, particularly benefitting the euro, which had been under pressure. However, Leroux also warns of a potential negative aspect for the markets if a quick decision is made in favour of a Russian oil embargo, which could worsen inflationary pressures and lead to economic slowdown. On the other hand, Schmieding, chief economist at Berenberg, views Macron's re-election as a positive development, believing that France is likely to remain a key driver of growth and progress in Europe over the next five years, contributing to stability and development in the region.
Italy General Election 2023: The 2023 general election in Italy, which took place on or before June 1, 2023, was a significant event that could shape the country's future and impact various industries, including finance, tourism, and agriculture. The election results saw the far-right coalition led by Giorgia Meloni's Brothers of Italy party winning, and they are expected to form the government. However, the specific policies and their effects on these industries remain unclear. It is advisable to stay updated on Italy's political landscape to understand the country's direction and its potential implications for businesses and investments.
Upcoming Elections: What to Expect
Now, let's turn our attention to the forthcoming elections and provide a prognosis on what they might entail for businesses and the economy:
UK General Election: While the date is yet to be determined, the next UK general election will be a defining moment for the country's political and economic direction post-Brexit. Companies should remain vigilant as changes in leadership may result in policy revisions that impact trade, regulations, and market dynamics. While the future is inherently uncertain, experts can employ advanced modelling methods to gauge the likelihood of different potential scenarios in the upcoming general election. In their assessments, they consider the probability of minority governments formed through potential alliances, such as one between the Conservative and Reform parties or another involving Labour, Liberal Democrats, SNP, and Plaid Cymru.
US Presidential Election 2024: The upcoming November 2024 elections are set to be a significant focus in US politics. While it's too early to predict the results, several key factors are already shaping the lead-up to the elections and their potential outcomes. These factors include the trajectory of the US economy and the unity (or lack thereof) within the Democratic and Republican Parties. In the run-up to the elections, domestic political and policy risks will be elevated. With Democrats and Republicans each holding thin majorities in one house of Congress, negotiations over crucial policies, even essential spending bills, will be contentious. This raises the risk of government shutdowns as both parties position themselves for the high-stakes 2024 races.
Canada Federal Election 2025: Canada's next federal election, scheduled for October 20, 2025, will have a significant impact on policies related to international commerce, resource industries, and the broader economy. As of September 2023, Pierre Poilievre, the leader of the Conservative Party, is the favoured candidate to win the election. His party's rise in popularity can be attributed to his focus on addressing post-pandemic concerns, high inflation, rising interest rates, and housing costs in Canada. Poilievre is rebranding conservatism by emphasising limited government spending and regulation, while also appealing to moderates with concise policies.
His approach includes a commitment to offsetting new federal spending with equivalent cuts elsewhere, supporting drug treatment programs over decriminalisation, and advocating for both fossil fuels and renewable energy. Poilievre's strategy appears to unite populists, social conservatives, and centre-right moderates, potentially creating a winning coalition.
Australia Federal Election 2025: The next Australian federal election is scheduled for September 27, 2025, and it will involve all 150 seats in the House of Representatives and potentially 40 of the 76 Senate seats. The election will see the incumbent Prime Minister, Anthony Albanese, and his Labor Party competing for re-election against the Liberal/National Coalition, led by Opposition Leader Peter Dutton. In the last year, the economic landscape has become increasingly demanding, particularly for small businesses. Factors such as elevated inflation, reduced demand growth, and challenges in securing appropriate workforce have led to deteriorating conditions and confidence among small enterprises. The need for business financing has decelerated in line with interest rate hikes and a sluggish economic expansion. Small businesses continue to express difficulties in obtaining funding through traditional banking channels.
Prognosis for Businesses: Adaptability and Resilience
Elections significantly impact businesses in several ways, including changes in policy, political stability, trade, and industry-specific implications. To navigate these challenges successfully, businesses must:
Stay Informed: Keep a close watch on election developments, candidates' platforms, and potential policy changes that could impact your industry.
Plan: Develop contingency plans to adapt to different election outcomes and economic scenarios.
Lobby for Corporate Interests: Engage in proactive lobbying and advocacy to influence policy decisions that benefit your business.
Adapt their Business Strategy: Be prepared to adjust your business strategy to align with political changes and economic situations.
Focus on Resilience and Adaptability: Cultivate resilience and adaptability as key attributes to succeed in a world of constant political upheaval.
Elections can significantly shape the course of nations and have far-reaching effects on businesses and economies. Staying informed, planning for various scenarios, and being adaptable are essential strategies for businesses to thrive in the ever-evolving political landscape. With proactive measures and a keen understanding of election consequences, businesses can navigate the challenges and opportunities that lie ahead.