December 2017: Power plays: 2017 winners and losers

Compared with the shock-filled 2016, this year saw the electoral pendulum swing back towards the mainstream. While populist forces gained ground in important polls across Europe, veteran figures held on to power, much to the relief of those worried about the prospect of a collapsing liberal world order. Jacques Lafitte emphasises new French President Emmanuel Macron’s progress on tax and labour reforms, while David Smith praises President Mauricio Macri’s achievement of cutting inflation in Argentina by half. John Kornblum reassuringly argues that, despite the breakdown in coalition talks, Germany will maintain stability. In Saudi Arabia, Crown Prince Mohammad bin Salman took steps to address corruption – and, it seems, buttress his own power, ordering the arrest of several hundred policy-makers and businessmen. Elliot Hentov emphasises the need to build capital markets to facilitate economic development in the kingdom. Further east, both Xi Jinping and Shinzo Abe consolidated their power in China and Japan, setting the scene for a possible revival in co-operation, writes Adam Cotter.

In this month’s Focus report we review the OMFIF Advisers Network’s predictions for 2017 against the course of events. Overall, OMFIF advisers did well. Our advisers rightly predicted the Brazilian economy would stabilise in 2017 and that Chancellor Angela Merkel would be unable to win an outright victory in Germany’s election. Where our advisers were less surefooted was in forecasting dangers that have not (so far) materialised, such as Donald Trump sparking global market volatility and the possibility of armed conflict between the US and China. An unperturbed passage to 2018 is far from guaranteed. Britain remains in the spotlight. There are still considerable risks from the Brexit negotiations, as well as reasons to be optimistic, writes David Marsh in his review of Clean Brexit: Why Leaving the EU still makes sense, while William Wright debunks 10 myths about Brexit’s impact on the City.

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