This month’s coverage of the Americas features an update on Bolivia, where President Evo Morales has abandoned his pledge to step down at the completion of his current term in January 2020, and is spearheading a campaign by the governing MAS to amend

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DECEMBER COMING SOON
This month’s coverage of the Americas features an update on Bolivia, where President Evo Morales has abandoned his
pledge to step down at the completion of his current term in January 2020, and is spearheading a campaign by the
governing MAS to amend a constitutional provision that
prohibits the president from seeking another term. The
pro-government legislature has cleared the way to hold a
referendum on the issue in 2016, and polling data suggests
that the amendment will be approved.
The analysis will focus on the likely effect of Morales’
change of plans on the government’s policy approach
during the current term, which will be guided by electoral
considerations, rather than securing a legacy. It is a safe
bet that Morales will be disinclined to take any steps that
might alienate sections of his base of support before the
amendment is approved, but the end of the commodities
boom that has buoyed the leftist administration for the better part of a decade has highlighted the need to broaden the
country’s economic base. Achieving that objective will require steps by the government to create a more inviting climate
for foreign investment, and the update will examine what a likely 2019 re-election bid means for progress on that front.
In the Middle East and North Africa, PRS will examine recent developments affecting political risk in Algeria, including
the government’s efforts to deal with the fiscal strains arising from a steep decrease in oil income. The recently approved
budget for 2016 raises taxes on essential items and cuts overall expenditures by 9% compared to the spending plan for the
current year, rather drastic moves that are sure to produce the spread of discontent, and an increased risk of eruptions of
domestic unrest that could be exploited by extremist groups such as ISIL, which has established a foothold in neighboring
Libya, and more local jihadist groups, such as Al Qaeda in the Islamic Maghreb.
The report will examine the government’s strategy for dealing with the steep drop in revenues and the rapid depletion of
foreign reserves, neither of which is likely to be reversed before 2017, and assess the potential for the government’s straitened
circumstances to encourage the liberalization of restrictions on investment. President Abdelaziz Bouteflika’s health status,
and the possibility of a mid-term change in leadership, will also be addressed as a factor affecting both the level of turmoil
risk and the possibility of a shift in policy course.
Turning to Western Europe, PRS takes a look at what is in store for the United Kingdom now that Prime Minister David
Cameron’s Conservative Party has a governing majority through to 2020, and has extended its lead over the opposition due
to a growing economy and splits within the main opposition Labour Party, now led by Jeremy Corbyn, an “old-school”

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socialist with pacifist leanings. Our report looks at the government’s main challenges going into 2016, which include
allying with France to join the anti-ISIL coalition bombing Syria, dealing with the attendant refugee crisis and mitigating a
threatened National Health Service winter crisis, which has escaped the wider public spending cuts.
Other issues include border controls, the UK’s contributions to the EU budget and its clout in Brussels decision-making,
all of which will feed into the referendum to decide on British membership of the European Union promised by 2017. In
that context, the report will assess the probability of a vote in favor of “Brexit,” and the likely repercussions of the UK’s
withdrawal from the European bloc, including the potential for a renewed push for independence in Scotland. The report
will also assess Chancellor George Osborne’s recent Autumn Spending review, forming part of the annual budgeting
process, which is still projecting a fiscal surplus at the end of this parliament. We also look at more chronic structural
weaknesses, as record-low borrowing rates continue to fuel both a rise in housing prices and an increase in consumer debt.
A fully revised report on Portugal will discuss the outcome of the October elections, which produce a hung Parliament and
a minority government at a crucial juncture in an ongoing effort to lift the economy out of its debt-induced doldrums. A
very short-lived minority government headed by the incumbent Social Democratic Party has been replaced by a minority
government headed by the Socialist Party and supported by an unwieldy triumvirate of Communists, Greens, and the
Left Bloc, an arrangement that points to fierce policy clashes, as is likely to become apparent almost immediately as the
government prepares a budget for 2016.
The report will examine the range of policies available to the government to boost employment growth, and assess the
prospects for the easing of austerity to produce the desired result without risking a confidence-busting regression on the path
toward fiscal stability. We assess the likelihood that the promises made to President Anibal Cavaco Silva as conditions for
forming the government will be kept, and whether the country can meet the obligations enshrined in the EU’s fiscal pact,
which will essential to reducing the excessive sovereign debt burden. Ultimately, the report will assess whether Portugal can
remain an attractive proposition for investors, or instead is heading for a bout of instability that even fresh elections may
not resolve, given the enormity of the challenges ahead.
PRS’ coverage of Eastern Europe includes an update on Kazakhstan, where President Nursultan Nazarbayev earlier this
year won an extension of his mandate until April 2020, at which point he will be approaching his 80th birthday. The
absence of a clear succession plan has been identified as a key source of longer-term political risk for several years, and the
near-term threat of instability has been heightened as a result of a steep fall in global oil prices and the negative economic
and diplomatic fallout from Kazakhstan’s close ties with Russia. Nazarbayev’s platform included promises of liberal
reform designed to attract higher levels of investment, and the update will focus on an examination of the evidence of
progress along that front to date, and an assessment of the prospects for significant liberalization over the medium term.

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Founded in 1979, the PRS Group is among the earliest commercial providers of political and country risk forecasts. Origi-
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country risk that could be applied to a range of institutional settings. In the wake of the Iranian Revolution, where many
foreign firms were nationalized, the importance of the work intensified.
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Over in Asia, we look at developments in Thailand, where the appointed National Reform Council’s rejection of a new
draft constitution will delay the holding of elections that had been expected in 2016. The implied extension of effective
military rule is a troubling consequence in the light of the junta’s complete intolerance of dissent. The report will examine
the role of the military in governance and policy-making and the implications of the generals’ clear intent to ensure some
form of ongoing political involvement for the military for the country’s investor reputation, which has benefited from the
reduction of political instability over the last 18 months.
An examination of the military-backed government’s program to spark an economic recovery will include an assessment
of the impact of proposed substantial infrastructure spending on the fiscal metrics and how China’s transition to a slower
growth trajectory and the Trans-Pacific Partnership agreement will affect Thailand’s longer-term economic prospects.