Modi’s Road to Re-Election Gets Bumpier
While Modi remains favored to win re-election next year, things suddenly look less straightforward.
(Bloomberg) --
In less than 24 hours, Indian Prime Minister Narendra Modi has lost his central bank governor and – with votes still being counted — his Hindu-nationalist Bharatiya Janata Party could cede its hold over several states.
While Modi remains favored to win re-election next year, things suddenly look less straightforward.
The resignation of reserve bank chief Urjit Patel was a surprise, even though he’d been embroiled for weeks in a dispute with the government over central bank autonomy. And the state elections are adding to the turmoil in Indian markets.
That suggests Modi may have a harder time next year than in 2014, when he swept to office with a parliamentary majority and scooped up a bunch of states, allowing him to centralize power. Since then, his popularity has been dented by rising discontent in the countryside and an inability to boost job growth.
Still, there is one piece of good news. A London court has rejected Indian tycoon Vijay Mallya’s bid to avoid extradition on fraud and money-laundering charges. That could bolster Modi’s anti-corruption credentials — likely to resonate with voters more than a central bank imbroglio.
Global Headlines
Gambling with time | Having postponed a vote on her Brexit plan she was set to lose, Prime Minister Theresa May is gambling that time might change the arithmetic in Parliament. Any ballot is likely to now be in January, ever closer to the departure date from the European Union. May hopes that pressure from voters keen to get on with Brexit and worried about “No Deal” could shift some pro-EU lawmakers in her party, and even some in Labour. But she'd still need a chunk of the hard-line Brexit wing of her party.
Belt and Road blues | Governments from Sri Lanka to Malaysia are taking a more cautious approach toward Chinese President Xi Jinping's signature trade-and-infrastructure initiative, Iain Marlow and Dandan Li report. A pro-China president's ouster in the island nation of the Maldives in September illustrates the growing skepticism toward debt-heavy Belt and Road projects. “We have been burned,” says Fayyaz Ismail, the country's economic development minister.
Budget headaches | Just when the EU was winning Italy’s populists round to more moderate spending plans, liberal poster boy Emmanuel Macron looks set to blow the bloc’s budget rules out of the water with his plans to placate Yellow Vest protesters who have ravaged Paris for weeks. Initial estimates suggest tax cuts and new subsidies could push the French deficit to 3.5 percent of GDP next year. Now the Italians are pointing to the turmoil in France as the best argument against EU austerity.
Superpower showdown | Trade deal or no trade deal, U.S. efforts to prosecute Chinese executive Meng Wanzhou shows the world’s largest economies are already engaged in a battle to determine if the U.S. remains the predominant superpower or China rises as a viable counterweight. David Tweed and Enda Curran report that Meng’s company, Huawei Technologies, epitomizes U.S. insecurity about growing Chinese technological prowess. Meng remains in jail in Vancouver after her bail proposal failed to satisfy a Canadian judge.
Kelly’s replacement | The search for a new White House chief of staff is beginning to take shape, with allies of Republican Representative Mark Meadows pressing his candidacy. Trade representative Robert Lighthizer is another serious contender. The urgency of filling the post is underscored by a meeting Donald Trump plans today with Congress’s top two Democrats – his first in a year – aimed at averting a partial government shutdown after Dec. 21.
Bolsonaro woes | It was meant to be a big day for Jair Bolsonaro. But a ceremony in Brazil yesterday to certify the incoming president's election victory was overshadowed by squabbles between leaders of his party and unanswered questions about payments involving close family members. With the fight against corruption one of his key campaign pledges, the media is already snapping at his heels. And his term doesn't even begin until Jan. 1.
What to Watch
- Google CEO Sundar Pichai will have to defend the internet giant against allegations of political bias and a barrage of other criticism during his first congressional hearing today.
- A bipartisan drive in the U.S. Senate to approve tough sanctions on Saudi Arabia for the murder of columnist Jamal Khashoggi will slip into next year, as the lawmakers struggle to agree on a response to the killing they say was ordered by Crown Prince Mohammed bin Salman.
And finally ... When a Labour lawmaker picked up the mace in the House of Commons last night to protest May’s decision to put off the Brexit vote, he was making a statement with revolutionary echoes. Lloyd Russell-Moyle held up the five-foot piece of priceless silver jewelry before carrying it toward the door, where it was seized by two women in black frock coats. The mace — which dates from the reign of Charles II in the 17th century — is a symbol of Parliament’s power and no one is supposed to touch it.
--With assistance from Karl Maier, Kathleen Hunter, Ben Sills and Brendan Scott.
To contact the editor responsible for this story: Rosalind Mathieson at rmathieson3@bloomberg.net
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