Political Risk Analysis - Ruling Party Presidential Win Positive For Policy Continuity - JAN 2018
BMI View: Sooronbay Jeenbekov from Kyrgyzstan ' s ruling Social Democratic Party looks set to become the next president of Kyrgyzstan and his election is likely to be positive for policy continuity, enabling the government to continue with its existing development initiatives. However, we cannot rule out the possibility of runner up Omurbek Babanov ' s supporters launching protests against the government, with Babanov showing no signs of having accepted the results. In view of the possible risks to social stability and continued political uncertainty, we maintain our short-term political risk score of 56.3.
Kyrgyzstan went to the polls on October 15 to elect a new president following outgoing President Almazbek Atambayev's announcement that he would step down upon the expiration of his term in December 2017. With 97% of the vote having been counted, Sooronbay Jeenbekov from the ruling Social Democratic Party (SDPK) looks set to become the next president, having won approximately 54% of the vote. We expect the election results to be positive for policy continuity, with Jeenbekov having the support of Atambayev, which will enable the government to continue with its development initiatives. However, we note that allegations of government pressure in the run up to the vote on runner up and opposition leader Omurbek Babnov's campaign presents a degree of political uncertainty, with Babanov showing no signs of conceding defeat. As such, it is possible that his supporters could launch protests against the government, in turn undermining social stability. We have thus maintained our short-term political risk score at 56.3 (out of 100) to reflect ongoing challenges.
Summary Of Results
Initial results from the Central Election Commission (CEC) indicate that Jeenbekov has won 54.2% of the vote, with a voter turnout of 55.9%. According to CEC head Nurzhan Shayldabekova, it is likely that Jeenbekov would win the election as 'the remaining three percent of ballots will not change the overall picture' and as such, 'the elections can be considered valid'. Leader of the opposition Respublika party, Babanov, obtained 33.5% of the vote. With Jeenbekov having obtained more than 50% of the vote, the presidential election will not need to enter the second round, contrary to what initial polls had suggested.
We note that the largely peaceful handover of power will bode well for the gradual development of democracy in Kyrgyzstan, with the country's first two presidents having been overthrown in 2005 and 2010. The handover also marks the first peaceful power transition since 2005, with Atambayev's own election in 2011 coming on the back of ethnic and political violence following the deposal of former president Kurmanbek Bakiyev in 2010. During his address, Jeenbekov noted that the country 'had shown the whole world that we are a democratic and sovereign state, that only the people of Kyrgyzstan decide the country's destiny'.
Balance Of Power To Remain Intact
The election of Jeenbekov will be positive for policy continuity, but will have a limited impact on the current political balance in Kyrgyzstan. With Jeenbekov being a close ally of the outgoing Atambayev, the outgoing president is unlikely to seek to undermine Jeenbekov's initiatives through various measures. Instead, Jeenbekov's government will likely seek to continue implementing the government's existing policies. Furthermore, Jeenbekov's win will not change the balance of power in parliament, with the SDPK remaining the largest party (having 38 out of 120 seats in parliament). Babanov's party also remains the second largest party (with 23 seats).
A breakdown of the election results also indicates that the country continues to vote along ethnic and tribal lines, with politics in the country still being largely clan-based. Kyrgyzstan has more than 80 ethnic groups and we had noted that tribal affiliations could play a critical role, with Jeenbekov hailing from an area with large Uzbek and Tajik communities, while Babanov draws his support from the more ethnically Kyrgyz north (see ' No Clear Presidential Candidate In Sight ' , July 26). Data from the CEC showed that Babanov won the vote in the northern Chui and Talas regions, while Jeenbekov won the populous southern region of Osh.
Policy Continuity Positive For Growth
We expect the Jeenbekov administration to continue pursuing the government's economic policies and persist with ongoing efforts to streamline technical regulations in a bid to adhere to the Eurasian Economic Union (EEU's) standards, which will be supportive of the country's efforts to boost exports to the EEU. In addition, we expect technical cooperation projects between Kyrgyzstan and Germany to continue through 2017-2018 in accordance with the framework of bilateral technical and financial cooperation. As such, we maintain our real GDP forecasts for growth to expand by 1.8% in 2017 and 4.4% in 2018.
Social Stability Risks Remain
That said, we highlight that Babanov's refusal to accept the outcome of the vote continues to present a degree of uncertainty and that protests by his supporters could undermine social stability. During the time of writing, there is no sign that Babanov has conceded defeat, with the AFP noting that Babanov's team is conducting 'a parallel count'. In response to the rumours of possible protests by Babanov's supporters, Atambayev warned that any violence would be harshly dealt with, stating that he 'would like to cleanse (the country of) them completely'. The government's threat of a possible crackdown thus presents downside risks to the country's political outlook.