Political Overview 3.17.24

Welcome to this edition of the Political Overview, presented by Bespoke Business Development’s political risk advisory team.

This week, we analyze the G7’s assertive position on China. In other developments, Germany is set to vote on a major fund for infrastructure and the green transition, the EU is moving toward increased defense spending, and South Korea anxiously awaits the verdict on President Yoon’s impeachment. Meanwhile, the Bank of Japan is expected to hold interest rates steady, Serbia’s prime minister plans to resign amid protests, and budget negotiations remain rocky in Brazil and South Africa.

Global Snapshot

G7 Statement on China

The G7 foreign ministers issued a forceful statement on 14 March, condemning China’s “illicit, provocative, coercive and dangerous actions” in maritime areas, omitting previous reassurances on the One China Policy. The group also criticized China’s aggressive behavior toward the Philippines and Vietnam in the South China Sea.

China’s Reaction

China’s embassy in Canada fired back, accusing the G7 of interfering in its domestic affairs and misrepresenting its actions. While direct retaliation is unlikely, Beijing may ramp up efforts to strengthen BRICs as a counterforce representing developing nations.

Key Regions to Watch

ASIA-PACIFIC

  • South Korea
    Seoul awaits the Constitutional Court’s decision on President Yoon Suk-yeol’s impeachment. Authorities have canceled police leave and plan to deploy 20,000 riot officers to manage potential unrest. The ruling is expected around 20 or 21 March.
  • Japan
    The Bank of Japan is likely to maintain its current policy rate of 0.5% during its 19 March meeting. Although inflation and wage growth suggest a rate hike could come soon, global economic uncertainty—exacerbated by U.S. trade tensions—could delay action until May or June.
  • Thailand
    The government and opposition will meet to set terms for a no-confidence motion against PM Paetongtarn Shinawatra scheduled for 24 March. The opposition wants a longer debate to spotlight economic issues and the influence of ex-PM Thaksin Shinawatra, but the government may push back to avoid such focus.

EUROPE

  • Germany
    On 18 March, the Bundestag will vote on a €500 billion special fund for infrastructure and green projects, alongside an exemption for defense spending from fiscal constraints. The measure has enough backing in the Bundestag, but its passage in the Bundesrat may hinge on support from Bavaria’s CSU.
  • European Union
    At the 20–21 March European Council meeting, the Commission will propose a defense white paper aimed at easing fiscal rules to enable defense investment. A new loan program will be introduced, though mutual defense bonds remain off the table due to skepticism from countries like Germany and the Netherlands.
  • Russia/Ukraine
    A series of key diplomatic events will focus on Ukraine this week. The EU Foreign Affairs Council will discuss support for Ukraine on 17 March, followed by a scheduled call between Presidents Trump and Putin on 18 March to discuss a ceasefire proposal. The European Council will revisit defense and aid measures on 20–21 March.
  • Serbia
    Following historic protests in Belgrade on 15 March, parliament is expected to officially accept PM Milos Vucevic’s resignation by 19 March. This will initiate a 30-day window to form a new government or call elections. Protest leaders are also planning further action.

LATIN AMERICA

  • Brazil
    Brazil’s Joint Budget Committee may miss its 19 March deadline to vote on the annual budget. Although the budget was submitted on time, long-standing disputes over allocations have delayed approval. Even if the committee passes the bill this week, a full congressional vote may not occur until late March due to key leaders traveling with President Lula to Japan.
  • Colombia
    President Gustavo Petro has declared 18 March a “civic day” for government workers to support rallies backing his labor reform, which faces rejection in a Senate committee. Petro has also proposed a national referendum. However, some local leaders have refused to grant leave, and weak turnout could undercut the reform push.

AFRICA

  • South Africa
    Both the national budget and relations with the U.S. are in the spotlight. The ANC no longer holds a parliamentary majority, making budget passage more complex. Meanwhile, diplomatic ties have taken a hit following the expulsion of South Africa’s ambassador by U.S. Secretary of State Marco Rubio, complicating President Ramaphosa’s diplomatic reset efforts.
  • DRC/Great Lakes Region
    Angola will host peace talks on 18 March aimed at ending regional conflicts in the Great Lakes area. While the M23 rebel group supports negotiations, the DRC government has not yet confirmed participation. If President Tshisekedi agrees to attend, it would mark the first direct talks in three years between the DRC and M23.

The views and opinions expressed in this article are solely those of the authors and do not necessarily reflect those of Bespoke Business Development. They are intended to encourage discussion and reflection, rather than serve as legal, financial, accounting, tax, or professional advice.