Half-Time Analysis in the World’s Biggest Election Year

As we approach the half-way point of 2024, the world’s biggest-ever election year, how should international businesses and investors assess the landscape so far? Some of the biggest votes have already been decided (Indonesia; Russia); some are underway as you read this (India; the European Union); and of course, the most significant of all is still several months away.

How does the half-time scorecard look?

Many investors would have reason to be quietly confident – or at least not despondent. The fashionable narrative about a populist anti-business wave that would de-globalize the world economy has not materialized. The new President of Indonesia, Prabowo Subianto, and the recently reelected Prime Minister of India, Narendra Modi, embrace some populist themes but also both openly welcome new foreign investment and promise a better climate for business. Center-left parties in the U.K. and South Korea have inched towards more pro-business platforms in their pursuit of power (according to current polls, both will succeed in that pursuit).

Across vastly different economies and electorates, common themes are only occasionally discernible. One theme – which serves as both opportunity and threat for investors – is promises of vast subsidies and industrial policy, mostly in response (or homage) to America’s Inflation Reduction Act (IRA). Election platforms in 2024 include ‘Make in India’, an EU ‘Net Zero Industry’ industrial strategy, and the subsidy-heavy platforms of both U.S. Presidential candidates.

Drilling down further, in some specific policy fields, global industries will see changes as a direct result of election campaigns in 2024.

Energy: In India, Narendra Modi and his Bharatiya Janata Party (BJP) won their third consecutive election. Modi has set ambitious climate goals including lifting the share of clean-power capacity in its electricity mix to 50% and guiding the economy toward net zero by 2070. Indonesia’s new President Prabowo has announced a vision of the nation as a “renewable energy superpower”, through a blend of targets, subsidies and domestic demand. Could these two huge, fast-growing markets drive a new approach to clean-energy financing and innovation?

Europe – often a first-mover on green targets – may move in the opposition direction. Parties and politicians supportive of the EU’s ‘Green Deal’ tax-and-regulation package are likely to lose ground in June’s elections. A broad right-leaning coalition could emerge, prioritizing energy security ahead of ever-stricter climate targets.

Semiconductors: Semiconductors are the brains of modern electronics, playing a key part in everything from our phones to microwaves to F-16 fighter jets. Taiwan, estimated to manufacture roughly 64% of the world’s semiconductors, held its Presidential election in January. The people of Taiwan selected Lai Ching-te, who is a strong advocate for Taiwanese independence and an advocate for strengthening Taiwan’s relation with the U.S. and other democracies around the world. As Taiwan leans further into its independence and tensions mount between Taiwan, China and the U.S., could Taiwan’s semiconductor manufacturing capacity be targeted?

In November 2023, the U.S. and Indonesia announced a partnership to explore opportunities to grow and diversify the global semiconductor ecosystem under the International Technology Security and Innovation (ITSI) Fund, created by the CHIPS Act of 2022. And this past February, Indonesia – the third largest democracy in the world – selected Prabowo Subianto to succeed President Joko “Jokowi” Widodo. While it’s expected that Prabowo will continue his predecessor’s cooperation with the U.S. on semiconductors, there remain a series of unknowns around his administration’s approach to technology transfer and infrastructure development, especially if regional tensions rise further.

Latin America: Across Latin America, a string of elections have passed recently that feature a mix of polarizing figures as well as fresh new faces. Several of the countries holding elections are battling tough issues within their borders like crime and poverty that have greater implications on the stability of the region and their relationships with the United States. A few to highlight are Mexico, El Salvador, and Panama.

  • Mexico: At the beginning of June, Mexico elected its first female president, Claudia Sheinbaum. Sheinbaum is considered to be current President Andrés Manuel López Obrador’s (also known by his initials, AMLO) successor – despite their wildly different personality types. She vows to continue many of AMLO’s policies and plans to develop the use of renewable energy to meet Mexico’s climate pledge of a 35% emissions reduction by 2030 under the Paris Accord. However, Sheinbaum faces a difficult task going forward – winning AMLO’s fiercely loyal followers to her side, at the same time as balancing U.S. pressure on migration and trade.
  • El Salvador: On February 4th Nayib Bukele won re-election with 85% of the vote. His party, New Ideas, also claimed a super majority after winning 54 of the 60 congressional seats. In Bukele’s first term, he was able to take El Salvador from being the most unsafe country to one of the safest. His aggressive policies on criminals and gangs, which saw more than 75,000 Salvadorans arrested without charges, has faced backlash from human rights groups. In his second term, he will be met with questions of how to address extreme poverty, which has doubled under him, and private investment.
  • Panama: Panama has been a close and important strategic ally of the U.S. since the Panama Canal was constructed in 1904. The canal plays a critical role in the global supply chain of the world. Panamanians voted in May to elect former security minister Jose Raul Mulino – who garnered praise and support from former President Ricardo Martinelli, who was barred by the electoral authority from seeking another term after being convicted of money laundering. Mulino promises his government will be pro-investment and pro-business while his rivals argue Mulino’s victory will just allow Martinelli to remain in a position of power.
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