Economic Analysis - Political And Social Instability Likely To Continue Post-Election - SEPT 2017

BMI View: It is likely that Prime Minister Peter O'Neil will win a second-term as the head of government in the 2017 election given that he had won a fourth term in Parliament, and his PNC is set to emerge as the biggest party with the most numbers of elected MPs. This, however, portends a period of continued social instability given the leader's growing unpopularity and the lack of a credible election.

Vote counting is under way in Papua New Guinea (PNG) for the parliamentary election (June 24 - July 8), but the voting process has been marred by multiple counts of irregularities, according to media reports. Unrest and election violence also broke out in many parts of the country, particularly in the highlands region, in line with our view that social instability would persist in the run-up to the election ( see ' Anti-Corruption Efforts On The Backburner, More Violence To Ensue ' , May 24). While the People National Congress (PNC) has suffered several high-profile losses, it is on track to retain its dominant position in the government with the most members of parliament (MPs) based on early results. Meanwhile, Prime Minister Peter O'Neill also managed to retain his parliamentary seat for a fourth term, suggesting that he will likely remain as the head of government for another five-year term. However, given O'Neil's poor track record at economic management and corruption allegations, we believe that social instability is likely to persist if he gets re-elected as prime minister, with protesters and the opposition likely to take to the streets, and the administration tightening its grip on power by clamping down on them. This will likely lead to frequent clashes between security forces and the people, as well as continued political uncertainty, informing our decision to maintain PNG's short-term political risk index score at a low 43.3 out of 100.

Credibility Of Parliamentary Election s In Question

Social Instability And Policy Uncertainty Are Major Risks
Papua New Guinea - Components Of Short-Term Political Risk Index Score, Out Of 100

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