Election fever hit India and Australia in May. The former, the largest democratic election in the world, resulted in…
Election fever hit India and Australia in May. The former, the largest democratic election in the world, resulted in a comfortable win for the incumbent – Narendra Modi and his Hindu Nationalist Party (Bharatiya Janata Party). Mr Modi comes from a humble background and this appears to have resonated with millions of voters aspiring to a similar uplift in fortunes. Amongst other things he has promised free medical insurance, 100 new airports and the installation of 100 million toilets – something that matters in a country deficient in basic sanitation.
India – an opportunity not to be squandered
We have long admired the economic potential offered by India but, like many, been frustrated at sclerotic government and administration, mountains of red tape and the struggle to adequately educate the approximate 47% of the population that is under the age of 24 (a mere 650 million people). This is the start of Mr Modi’s sixth year in office – we hope that he, and India, don’t squander this latest opportunity.
Australia’s election result could provide some much-needed stability
Australia sprang an election surprise. All the pre-election polls had the Labor opposition taking power from the centre-right Liberal National Party (LNP). However, within a few hours from the start of vote counting it became apparent that Scott Morrison (the Prime Minister) and his coalition would not only win but achieve an absolute majority in Parliament – thus avoiding the complication of relying on minor parties or independents to govern.
Known for its merry-go-round of Prime Ministers (six in the last nine years) there is now a chance of at least three years of stability as that is the theoretical duration of the Australian election cycle. The public is weary of political machinations and flip-flops. Mr Morrison has now earned himself a level of authority not enjoyed by any recent holders of the top job. We hope it is used wisely.
The European Union goes to the polls
May also saw elections in the European Union, where all 28-member states elect representatives to the European Parliament. The Brexit Party (a single-issue Party just a few months old) headed by Nigel Farage, stormed across the line in the UK with 32% of the vote, whilst the Conservatives limped home in 5th place with just 9% of the vote. The Labour Party secured 14%, the Liberal Democrats 19% and the Greens 11%. The poor showing by the Conservatives and Labour reflects disillusionment about the way the Brexit process has been handled. Farage taps into populist sentiments and is an accomplished media performer – something that matters a lot in modern day politics. The next general election in the UK is scheduled for 2022 and the performance by Farage and his team is a significant shot across the bows of both major parties.
The cosy and predictable political landscape in Europe has been shattered. Pro-EU parties still hold sway throughout Europe but in France, Poland, Italy and Britain the opposite is now true. Quite where it all heads next is impossible to forecast.
Elsewhere in the EU the results are fragmented but the winners appear to be the Greens and Liberals whilst the losers are the mainstream centre-right and centre-left parties that have dominated for decades. The cosy and predictable political landscape in Europe has been shattered. Pro-EU parties still hold sway throughout Europe but in France, Poland, Italy and Britain the opposite is now true.
Quite where it all heads next is impossible to forecast.
Views and opinions have been arrived at by BMO Global Asset Management and should not be considered to be a recommendation or solicitation to buy or sell any companies that may be mentioned.
The information, opinions, estimates or forecasts contained in this document were obtained from sources reasonably believed to be reliable and are subject to change at any time.