2024: Election Year Will Impact Global Stability

2024: Election Year Will Impact Global Stability

This year, elections will take place in countries that are home to nearly half the world’s population, from Taiwan’s general election in January to the US presidential election in November.

The vote comes amid growing economic and geopolitical unrest, including the war in Ukraine, conflicts in the Middle East and rising trade tensions between the United States and China, the world’s two largest economies.

In some countries, there are concerns about the resilience of democracy itself, as political discourse is polarized or distorted by disinformation. Many of this year’s elections will not be free and fair – or their results will be contested.

As we enter the middle of the biggest election year in history, here are some common themes that have emerged in Reuters’ reporting from around the world:

From the price of green onions in Indonesia to higher energy bills across Europe, rising prices for food, energy and other basic necessities have hit the living standards of households around the world. Incumbent governments and leaders are paying for it.

Polls showed that concerns about the cost of living were a major factor in the fall in support for Prime Minister Narendra Modi’s party in India, the losses suffered by mainstream parties in June’s European Parliament elections and the defeat of Britain’s ruling Conservatives in the polls.

In Africa, discontent over living standards and unemployment contributed to the ANC losing its majority in South African elections. Rising poverty is likely to help determine the outcome of Ghana’s December elections to replace President Nana Akufo-Addo.

Pre-election polls suggest voters are similarly unimpressed with President Joe Biden’s efforts to improve their livelihoods, with many Americans feeling their living standards are falling despite strong economic data. In one outlier: In Mexico, the ruling MORENA party emerged victorious after offering generous subsidies to low-income voters.

While economic policymakers say there are signs that inflation is returning to normal, they warn that inflation is not yet fully under control and many economies are still vulnerable.

“A number of bottlenecks could push the global economy off course,” Agustin Carstens, head of the umbrella central bank Bank of International Settlements (BIS), warned in June.

Green transition

With the cost of living a top concern for many voters, climate change is often ignored in election campaigns, even as global temperatures are breaking new records and the death toll from extreme heat is rising.

While surveys show that Europeans still support ambitious measures to tackle global warming, the debate focuses on the perceived cost of living. The agricultural sector and other lobby groups are increasingly calling for a relaxation of net-zero policies.

In the EU elections, the Greens’ environmentalists lost most of the gains they made five years earlier. In Britain, Labour abandoned a £28bn green investment pledge ahead of the July 4 general election, saying the country could not afford it, while their Conservative rivals described themselves as “on the side of motorists” and attacked low-traffic and low-emissions schemes.

The biggest challenge to the green transition may come from the United States, with Donald Trump campaigning on policies that support fossil fuel use. It remains to be seen how much of Biden’s Inflation Reduction Act (IRA) green subsidies will remain in place in a Trump victory.

To (far) right?

The cost of living crisis has led to growing support for far-right movements in Western countries. These movements combine anti-immigration and nationalist policies, often unfounded economic spending plans and populist rhetoric aimed at the global elite.

In March, Portugal’s Chega party quadrupled its seats in parliament, becoming the country’s third-largest party. Three months later, its far-right, Eurosceptic counterparts across Europe made gains in the European Parliament elections.

In France, Marine Le Pen’s Rassemblement National failed to win Sunday’s election, but it did become the largest party in a parliament that is deadlocked with no seats, threatening to plunge Europe’s second-largest economy into policy paralysis.

In Britain, the anti-immigration, nationalist Reform Party won more than four million votes, contributing to a decline in support for the governing Conservatives, even though Britain’s first-past-the-post electoral system meant the party won only a handful of seats.

Austria’s September 29 elections are being closely watched. Polls show the far-right Freedom Party (FPÖ) as the main rival after coming first in the European Parliament elections.

In the United States, Trump has made immigration a key domestic campaign issue, announcing mass deportations, abolishing birthright citizenship and expanding a ban on people from certain countries.

Mohit Kumar, chief economist at investment house Jefferies, noted that immigration was the hottest election issue in major Western economies, where ageing populations have created labour shortages.

“Economically we need immigration, but the political dynamics are shifting further and further away from immigration,” he said.

Debt and electoral generosity

With economic problems so widespread, many politicians are offering to spend big and cut taxes in an attempt to gain power, at the risk of further increasing the global debt mountain, which is already at record levels after the massive stimulus packages in the rich economies following the pandemic.

Credit ratings agency S&P Global has warned that the United States, France and other Group of Seven (G7) governments are unlikely to halt their debt increases “at the current stage of their election cycle”.

The BIS annual report in June said that an election year such as this carries a “particularly high” risk of fiscal expansion, which could complicate efforts to bring inflation back to the target.

Budget watchdogs in Britain and France, two countries struggling to balance their budgets, noted that many spending pledges were unfunded or unrealistically budgeted.

Trump has pledged to maintain the broad 2017 tax cut he signed into law while in office, and his economic team has discussed further spending cuts beyond those enacted in his first term.

Biden, meanwhile, is proposing to raise taxes on corporations and wealthy individuals, while promising not to raise taxes on households making less than $400,000 a year and to help low- and middle-income Americans with child care costs. The U.S. federal government currently has more than $34 trillion in debt.

Such debt makes the global economy more vulnerable to financial shocks, prompting the International Monetary Fund to call on governments to reduce their borrowing.

“Unfortunately, the budget plans so far have been insufficient and could be further derailed given the record number of elections this year,” chief economist Pierre-Olivier Gourinchas said in a recent blog.

As geopolitical tensions rise, defense and security issues have featured prominently in a number of election campaigns this year, particularly in countries close to flashpoints.

In February, Finland elected President Alexander Stubb, who campaigned for the previously non-aligned country to fully participate in NATO and allow the transit of nuclear weapons through NATO. Incumbent presidents in Lithuania won an election dominated by concerns about Russia and calls for increased defense spending.

Taiwan’s presidential and parliamentary elections on Jan. 13 revolved around arguments over how best to deal with China, which regards the island as its own territory. The ruling Democratic People’s Party secured the presidency for a third term as its candidate promised to protect Taiwan from intimidation while stressing the need for dialogue with Beijing.

In the United States, Democratic voters’ anger over Israel’s military action in Gaza—and Biden’s continued support for Israel—has proven a major vulnerability for him. American positions on the conflict have divided along party lines, with Republicans largely supporting Israel.

While Biden has expressed unwavering support for NATO, Trump has said that if he returns to the White House, America will fundamentally rethink the purpose of NATO. He has also claimed, without evidence, that if elected, he will end the conflict in Ukraine before he even takes office. To which Biden has responded that Trump “has no idea what he’s talking about.”

Pro-democracy watchdogs estimate that nearly three-quarters of the world’s population lives in autocracies, opens new tab. Observers and human rights groups have raised concerns about the fairness of this year’s elections in Bangladesh, Azerbaijan, Belarus, Cambodia, Iran and Russia. Voters in Algeria and Uzbekistan face similar questions.

Modi’s election defeat has been hailed by some commentators, opens new tab as evidence of the resilience of his democracy. There was relief at the peaceful transfer of power in Senegal in March after moves by the incumbent president to delay the vote sparked protests.

The biggest test for democracy this year, however, may come in Washington.

Trump refuses to commit to accepting the election results or ruling out possible violence surrounding the November 5 election, and is already laying the groundwork to challenge a potential defeat.

“We should be very concerned,” Steven Levitsky, a political scientist and professor of public administration at Harvard University, said in June at a meeting of the Brookings think tank.

“A democracy cannot survive if one party in a two-party system does not play by the rules of democracy.”