Introduction
Power shifts remain a cyclical challenge for risk management professionals. Political transitions can increase country risk and disrupt investment, lending and insurance, while directional swings in public policy, international relations and/or social attitudes impact market sentiment and shape real business environments. In 2019, major emerging markets in Africa, Asia and Latin America hosted national elections. A late snap vote in the United Kingdom ended a year of hyper-partisanship and legislative gridlock. With the exception of Argentina, the returns in each case favoured incumbent leaders, with noteworthy changes to vote share and distribution.
Looking to 2020, the presidential and legislative elections in the United States will seize global attention, as the results could prove a significant tipping point in macro trends. President Donald J. Trump will seek a second term in office, after four years of ideological polarization and significant reorientation in American foreign and domestic policy. Mr. Trump faces a crowded field of Democratic challengers, split between competing progressive and moderate party factions. On Capitol Hill, Republicans will seek to win back control of the House of Representatives after losing ground in the 2018 midterm elections, all while keeping their majority in the Senate. Subject to partisan divides between chambers and branches of government, the new Congress could serve to constrain or further empower the next President.