Rahul Gandhi's elevation, a stronger Cong an opportunity: Oxford Analytica

The suppression of the right to expression and attacks on journalists are among political and policy risks for 2018

The elevation of Rahul Gandhi as the president of Congress, the principal Opposition party, offers an Asian regional "opportunity" while suppression of the right to expression manifesting in attacks on journalists is among political and policy risks for 2018, according to analysts at Oxford Analytica.

Presenting the risks and opportunities for the next year, the Oxford-based global analysis and advisory firm said the business and investment risk drivers would not diminish in 2018, but that they would be secondary to growing political and policy-driven risks -- from the global level down to the sub-national level.

Besides North Korean political developments, it said the crackdown on freedom of expression in India and China was a risk. "This is happening most blatantly in China, where the government is censoring the internet more and more aggressively, regardless of the effect this has on businesses. It's also starting to demand that foreign businesses collaborate in this censorship," said Oxford Analytica. There are similar authoritarian trends in other countries, too. It cited the example of India where "journalists and academics who criticise the government are increasingly facing legal pressure and are even being physically attacked".

A third risk involves Pakistan’s general election, which is likely to happen in mid-2018. The election could see Prime Minister Shahid Khaqan Abbasi's government unseated by Imran Khan's Pakistan Tehreek-e-Insaf. Khan coming to power may elevate risks to two of Pakistan's key bilateral relations. "Firstly, he wouldn't be afraid to defy the United States, which would potentially undermine military cooperation over Afghanistan; and secondly, he would be less inclined than former Prime Minister Nawaz Sharif to pursue cordial relations with India, increasing the chance of regional conflict."

Among opportunities in Asia, it points to the formal launch of an Asia-Africa Growth Corridor by India and Japan, as an implicit alternative to China's Belt and Road Initiative. The plans for the new corridor are likely to mature in 2018. Delhi could initially invest $10 billion in the project and Tokyo $30 billion. "That sort of money would create opportunities surrounding infrastructure projects for a whole ecosystem of businesses, from legal services, to finance, to raw materials."

For India, specifically, with Rahul Gandhi as the leader of the Congress party, the party may see a resurgence in 2018. "Gandhi earned favourable reviews during his recent speaking tour of the United States and has a growing profile on social media. This suggests he may emerge as a more strident opponent to Prime Minister Narendra Modi. A stronger Congress may present a risk to the ruling Bharatiya Janata Party, but it also potentially provides an opportunity for greater scrutiny of Delhi's economic and developmental policy," said the firm. 

A third regional opportunity is what one might call 'the bright side of Brexit' for Asia. With the United Kingdom (UK) leaving the European Union (EU) customs union, it will regain the ability to negotiate free trade deals on its own.  

One of the largest risks for Europe next year is if Brexit negotiations fail. "If talks break down acrimoniously, or no agreement can be reached within the time available and the withdrawal period is not extended, it would mean 'no deal'." No outstanding legal and political issues would be resolved. The political and economic consequences would be extremely disruptive both for the EU and the UK. "Trade would revert to WTO rules, supply chains would be interrupted, companies might relocate and EU-UK cooperation on a wide range of issues such as nuclear regulation, security, and counter-terrorism would come into question."