By Ian Bremmer
September 7, 2018

In last week’s Risk Report, I wrote about the awful summers Turkey’s Recep Tayyip Erdogan and Argentina’s Mauricio Macri were having. Now, their autumns look to be even worse. But at least they’ll have company—here are five emerging markets bracing for tough months ahead:

Brazil

Like many other developing nations, Brazil benefited mightily from China’s meteoric rise. The commodities supercycle that Beijing fueled was a boon to resource-rich Brazil’s GDP… and to its corrupt politicians. The sprawling Lava Jato (Car Wash) corruption investigation—centered on the hundreds of millions paid by Brazilian construction giants to secure government contracts—and its related investigative offshoots has led to the convictions of more than 200 politicians and executives, and forced President Dilma Rousseff from office in August 2016. Brazil’s political system has yet to recover.

Case in point: Ahead of elections in October, the current presidential frontrunner is former President Luiz Inacio Lula da Silva, who is currently polling at around 40 percent—while sitting in a jail cell on corruption charges. He has been barred from standing in elections by the country’s electoral court (and is unlikely to get the supreme court to overturn the ruling). Another leading contender for the presidency, far-right Jair Bolsonaro, was stabbed this week in broad daylight.

Meanwhile, homicide rates have hit record highs. The government spends more of its budget paying interest on government debt than on education or health (according to 2016 figures). 43 percent of Brazilians say they’d leave the country if they could. And given that a record number of Brazilians aim to skip elections altogether (nearly 30 percent of them), it’s unlikely whoever wins will have the political mandate needed to shake up a sclerotic political system. That means more of the same for Brazil.

Russia

President Vladimir Putin surprised everyone last week by doing something he rarely does—retreating, at least a little. On the eve of this year’s World Cup, Moscow quietly announced that the retirement age would be increasing in phases from 60 to 65 for men by 2028 and from 55 to 63 for women by 2034. Nearly 80 percent of Russians opposed the move, and thousands took to the streets. Putin, who typically enjoys approval ratings north of 80 percent, saw his approval ratings plunge 16 points. That’s unacceptable for a man whose politically career is based on the perception of unassailable support from the Russian public.

So, in a televised address, Putin rolled back some of the most onerous aspects of the pension reform (limiting the age increase for women, though not for men), positioning himself as the defender of average Russians. That was probably the right tactical move for Putin, but the wrong strategy for Russia—oil prices are about half where they were ten years ago, the ruble has seen better days, and Moscow continues to face international sanctions with more likely on the way. Russia’s problems—if not Putin’s—will persist to autumn and beyond.

South Africa

South African President Cyril Ramaphosa came to power this past February after launching an intense intra-party struggle that finally ousted his predecessor Jacob Zuma, a man who at one point faced no less than 783 corruption charges. Ramaphosa’s arrival was heralded by investors and markets alike, even if the pro-business Ramaphosa did inherit a nationwide unemployment rate nearing 30 percent and what the World Bank describes as the most “unequal” country in the world.

That reality has led populist elements of Ramaphosa’s own party to push for a constitutional amendment that empowers the government to seize land from white farmers (without compensation when necessary) as a way of righting some of the wrongs created by apartheid. It’s understandably a lightning-rod issue, even attracting some attention from a prolific Twitter user across the Atlantic.

But Ramaphosa supports the measure only reluctantly, figuring the constitutional amendment would scare off much-needed foreign investment, particularly when South Africa just slid into recession and has a currency that’s lost nearly 20 percent of its value since January. Ramaphosa will thus spend much time balancing politics and economics this fall ahead of elections in mid-2019 — and in an environment where both may be headed for deeper trouble.

Indonesia

You might have seen references to the 1997-1998 Asian financial crisis this week given that Indonesia’s currency, the rupiah, is currently trading at a 20-year low. However, the headline numbers create a false sense of equivalence; that downturn was sharp and sudden, triggering a series of events that eventually led to the resignation of Indonesia’s president. Don’t expect anything similar this time around; Indonesia’s weakened rupiah is more the result of structural factors, among them rising U.S. interest rates that are hitting emerging markets more broadly (40 percent of Indonesia’s government bonds are owned by foreign investors and entities).

But a weakened rupiah and financial environment makes life more difficult for President Joko Widodo (commonly referred to as “Jokowi”) as he gears up for his re-election bid next spring. In early August, Jokowi tapped the chair of the Islamic Clerics Council as his running mate, a strategic move for the world’s most populous Muslim democracy and one where Joko’s opponent is an ultra-nationalist. But while that may be the deft move on Jokowi’s part, it may be bad news for Indonesia overall as it adds more momentum to claims that politics in the country are becoming increasingly Islamized. Troubled economic times are a boon for identity politics — and currency woes are hitting at the exact wrong time for Indonesia to emerge unscathed.

China

Like others on this list, the Fed’s decision to raise interest rates this past June hit China’s currency. But China is also locked in a worsening trade war with the U.S. The yuan has fallen by more than 8 percent since the trade war began in June; China’s Shanghai Composite index is now down more than 20 percent since its January peak. The U.S. is preparing to levy tariffs on an additional $200 billion on Chinese goods in coming weeks.

Things look set to get worse in coming months. As Trump’s domestic political worries are mounting, he will lash out where he can. His Chinese counterpart Xi Jinping will be hard-pressed to back down, but he’ll be looking for off-ramps as he grows increasingly concerned about negative sentiment around headline growth, increased capital outflows and Chinese companies being cut out of international supply chains.

Xi’s best hope may be to wait for U.S. midterms to pass in November; as Trump gears up for his own reelection bid, he might become more sensitive to the collateral economic damage a trade war could inflict on him politically. In the meantime, the plan for China is steady as she goes. If only others on this list could say the same.

Ian Bremmer is the president of Eurasia Group and GZERO Media, and host of GZERO World on WNET/Thirteen

Contact us at editors@time.com.

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