Elections to Keep Asia in Limelight in 2024

Bangladesh 

The incumbent Awami League (AL) secured a supermajority in the general election held on January 7th, securing a fourth consecutive term for Prime Minister Sheikh Hasina Wajed. Winning 222 out of 299 directly contested seats. The AL faced limited opposition as the Bangladesh Nationalist Party (BNP) boycotted the polls. In the new parliament, the Jatiya Party, with 11 seats, is set to become the largest opposition party, while independent candidates claimed 62 seats.

The election is viewed as a setback for democracy in Bangladesh, with a historically low voter turnout of 40%, contrasting sharply with the 80% recorded in the 2018 elections, attributed to the BNP's boycott. Despite 28 small political parties participating, concerns about the election's credibility were amplified by videos depicting empty polling stations and alleged ballot box stuffing by election officers circulating on social media.

The victory ensures the AL's continued governance, signalling policy continuity in domestic politics. Priorities include IMF-backed reforms, notably subsidy rationalisation, and the completion of major infrastructure projects. With a lack of parliamentary opposition, effective checks and balances on policymaking are limited, potentially leading to dissent manifesting as street protests.

Taiwan

The results of Taiwan's elections on January 13th were in line with our expectation of Lai Ching‑te of the Democratic Progressive Party (DPP) securing the presidency. Meanwhile, the Kuomintang (KMT) narrowly emerged as the largest party in Taiwan's Legislative Yuan (LY, parliament).

Contentious domestic issues, such as the DPP's plan to phase out nuclear power by 2025, may face obstacles and legislative disagreements could impede progress on other fronts. The KMT is poised to obstruct Mr Lai's policy plans, highlighting the DPP's perceived inability to fulfill promises of reducing social inequality. Despite DPP's control of the presidency and legislature since 2016, challenges in addressing issues like housing affordability, job creation and wage growth persist. The LY results mean that the Taiwan People's Party, a third party, will hold a pivotal role in the legislature from 2024‑28, controlling eight seats. Cooperation with Mr Lai may be challenging, given criticisms of DPP policies by the TPP's founder, Ko Wen‑je, who advocates closer economic ties with China. While we expect the TPP to support both the DPP and KMT on a case-by-case basis, the risk of policy gridlock is elevated in 2024‑28.

In the coming months, heightened security concerns are expected sporadically in the Taiwan Strait. China's initial response has been restrained, likely influenced by the presence of US aircraft carriers near Taiwan and concerns about diplomatic repercussions. Despite this, China's longstanding skepticism towards Mr Lai precludes the possibility of cross-Strait dialogue with the DPP in 2024‑28. The vice‑president-elect, Hsiao Bi‑khim, is already under Chinese sanctions for "separatism." While scenarios like Taiwanese independence or a Chinese invasion remain less likely, questions surrounding Mr Lai's presidency could introduce some risk concerns regarding Taiwanese assets in the first half of 2024.  However, the new speaker in the Taiwan parliament is pro china and has suggested he visit China, which could avoid too much esculation between China and Taiwan (here). 

Pakistan

Pakistan’s February 8 legislative elections yielded a divided mandate, with no single party securing a majority to form a government. The major contenders were the Pakistan Tehreek-e-Insaf (PTI) led by former Prime Minister Imran Khan, the Pakistan Muslim League (PML-N) led by another former Prime Minister Nawaz Sharif, and the Pakistan People's Party (PPP) led by the Bhutto-Zardari family. Independent candidates supported by the PTI won the most seats, followed by the PML (N) and the PPP.

After prolonged negotiations, the PML (N) and PPP announced a coalition government, holding 152 out of 265 seats in the chamber. This coalition, including smaller parties, will meet the required total of 169 seats for government formation after adding 60 female legislators and 10 minority seats. Shehbaz Sharif of the PML (N) is the prime minister, while Asif Zardari of the PPP is likely to become president again. The delicate coalition with diverse agendas will rely on military support to maintain political stability despite its modest majority.

The incoming government faces the formidable task of rejuvenating a struggling economy. Prioritising negotiations with the IMF for a multi-year extended fund facility is crucial, given the expiring loan package at the end of March. Maintaining austere fiscal policies, rationalising tariffs, reducing subsidies, and limited progress on privatisation are anticipated measures. Allegations of vote-rigging may intensify anti-establishment sentiment, contributing to societal divisions and challenging the legitimacy of the coalition government. Despite the fragile nature of the coalition, moderate risk exists that it may not complete its full five-year term.

Indonesia

Indonesian elections took place on February 14 to choose the president, vice-president, and the legislative body. While official results are slated for mid‑March, preliminary sample counts indicated a significant lead for Prabowo Subianto, the incumbent defence minister and Gerindra party candidate, at approximately 60%.

In our view the time period between now and October, when the new president takes charge will allow Mr. Prabowo ample time to consider his cabinet options and gradually assume responsibilities from the outgoing president, Joko Widodo (Jokowi). The clear majority will provide Prabowo sufficient political leverage to shape his administration. Mr. Prabowo is expected to maintain Jokowi's inclusive approach, incorporating a wide range of parties into his administration. On the policy front, he is likely to maintain economic continuity in line with the Jokowi government. Ongoing flagship projects are set to continue, though some delays may occur, notably in the capital relocation project. However, Mr. Prabowo lacks Jokowi's extensive foreign affairs experience, potentially impacting efforts to attract foreign investment. Industrial policies introduced during the Jokowi era, such as downstream processing of critical minerals and electric-vehicle manufacturing, are likely to persist. While the other candidates have raised concerns about fraud, any disputes are not expected to succeed, and significant protests are unlikely.

Maldives 

Coming up this month are the legislative elections in Maldives. The political landscape in the Maldives experienced a significant shift in September 2023 when Mohamed Muizzu, representing the People's National Congress (PNC), defeated the incumbent president, Ibrahim Mohamed Solih. The election marked a blow to the ruling Maldivian Democratic Party (MDP), which currently controls the People's Majlis with 56 out of 87 seats.

Mr Muizzu’s victory, however, presents challenges for him, as the PNC and the Progressive Party of Maldives (PPM) form a minority in parliament. The MDP's influence (although expected to decline but still remain substantial) after the 2024 parliamentary elections, may pose obstacles to Mr. Muizzu's policy agenda. Moreover, the return of former president Abdulla Yameen Abdul Gayoom to domestic politics, following his shift from jail to house arrest after Muizzu's win, adds complexity. Yameen's potential formation of a new party and competition within the PPM-PNC alliance increases the risk of political instability. Following these dynamics, it appears that political tension in Maldives are likely to be heightened ahead of the upcoming elections this month. The MDP is likely to become the main opposition party, but Muizzu’s party along with the coalition will only hold a small majority in parliament, which will make policy implementation hard for the president.

South Korea

Meanwhile, the upcoming legislative election scheduled for April 2024 in South Korea is anticipated to be highly competitive. Despite the ruling party, Minjoo's current dominance in the national assembly with 164 out of 300 seats, against the People Power Party’s (PPP) 112 seats, projections suggest that Minjoo is likely to lose its majority status in the parliament. This outcome would maintain the ongoing division of executive and legislative powers, contributing to confrontational party politics.

Both major parties face challenges in expanding their voter base. Ongoing investigations into alleged abuse of power by Minjoo's leader, Lee Jae‑myung, have triggered internal conflicts, leading to the departure of several senior party members. This internal strife is expected to impact public opinion negatively and alienate swing voters, making it difficult for Minjoo to broaden its appeal. Additionally, public discontent with the PPP stems from economic concerns, particularly the high cost of living, and accusations of the president overstepping his authority to address a scandal involving the first lady.

Amidst the struggles of the two main parties, smaller and newer political entities, including those formed by former leaders of Minjoo and the PPP, have emerged. Although it is not anticipated that any third party will surpass the main contenders due to the first-past-the-post electoral system, these new entrants could divert votes from Minjoo and the PPP, elevating the risk of a hung parliament. Our expectation is that the there is a likely shift in the political landscape, with the PPP expected to surpass Minjoo and become the largest party in the national assembly.

India

In India, the world’s largest democracy and currently the fastest growing emerging market, legislative elections will take place over two months - April and May. The incumbent government, led by the ruling Bhartiya Janta Party (BJP) is expected to retain political hegemony. Prime minister, Narendra Modi’s popularity hasn’t waned in over a decade and this will see the BJP secure a third term. Although the BJP and its allies, termed the National Democratic Alliance are expecting over 400 seats (out of 543), this is ambitious in our view. The BJP though, will secure sufficient majority to remain in power. The government has announced its first list of candidates contesting elections across different states and the second list is expected shortly. Meanwhile, the INDIA coalition, is as yet to present an opposition candidate or even complete its seat sharing agreement within the alliance. As a consequence, the chances of the opposition making significant inroads is unlikely. However, there remain risks of surprises even for the BJP, and these could come from the north eastern states of Manipur, Assam and some northern states.  However, overall, it would appear a Modi 3.0 is likely to unfold in June. 

Sri Lanka

Sri Lanka is gearing up for a presidential election by September, with parliamentary elections being delayed to 2025, given fiscal constraints. The only coutnry to be holding elections in H2 2024. The National People's Party/Janatha Vimukthi Peramuna (NPP/JVP), a leftist opposition alliance, seems poised for success in both elections, reflecting widespread dissatisfaction with the country's main parties, the economic downturn in 2022, and the subsequent IMF program. Anura Kumara Dissanayake from the NPP/JVP is currently the front-runner for the presidency. However, the incumbent president, Ranil Wickremesinghe, is interested in extending his term and might consider a constitutional amendment to postpone the election. This move could allow for a longer period for the IMF program to yield results, which may work favourable for him. Wickremesinghe, who assumed power during the political crisis of 2022 without a popular mandate, faces challenges in distancing himself from the tarnished reputation of the Rajapaksa family. Given the recent uptick in the economy, and a favourable review from the IMF (expected this month) could support his candidacy, should the elections take place in September. The government has trimmed electricity tariffs, water tariffs and provided subsidies to alleviate the cost burden, and this too may work in Wickremesinghe’s favour. For now though the political landscape in Sri Lanka remains fragmented with no single candidate inspiring complete confidence in the public.