Can India's new government boost welfare spending without losing control of its budget deficit? Can Taiwan soothe ties with China? Can the Philippines widen its tax base and end Muslim and communist insurgencies?
As a busy election year in Asia draws to a close, the political risks for investors is shifting in many countries from uncertainty as to who will wield power to doubts whether freshly minted governments can implement promised pro-business policies.
"The problems for governments now are going to be to meet the expectations and fulfil the promises they've made, and they're not necessarily going to be able to do that," said Bruce Gale with security risk consultants Hill and Associates in Singapore.
YUSHA
Some signs are promising.
Malaysian Prime Minister Abdullah Badawi, elected in March, has given the green light to closer financial and investment links with Singapore and has lifted his predecessor Mahathir Mohamad's veto on free trade talks between the ASEAN and Australia and New Zealand.
India's new left-leaning central government has reached a deal with state governments to introduce a long-delayed valued added tax deemed crucial to improving the public finances.
But analysts say questions of legitimacy could dog some newly elected leaders, forming an unsettled political background for investors already unnerved by prospects of rising US interest rates and fears of a hard landing in China.
An index of non-Japan Asian shares compiled by Morgan Stanley Capital International has fallen 14.3 percent since April 13 and is down 5.5 percent so far this year.
NARROW VICTORIES
President Chen Shui-bian (
In the Philippines, the opposition has charged that President Gloria Macapagal Arroyo, who is due to be proclaimed president again this week, cheated her way to a narrow, 3 percentage point victory. Three bombs have been found in Manila since Sunday.
Steve Wilford of consultants Control Risks in Singapore said markets could take comfort at least that Philippine film star Fernando Poe Jr, a political novice, did not win the poll.
But Arroyo, who took power in 2001 when her predecessor, Joseph Estrada, was ousted after people power protests, did not receive the overwhelming popular mandate she was seeking.
As a result, Wilford said the chances were slim that she could overcome vested interests and force through badly needed reforms such as an overhaul of the tax agency.
"Her victory mans a degree of continuity for foreign investors, but it also means more of the same muddling through," Wilford said.
Tony Nafte of brokers CLSA in Hong Kong also struck a skeptical note. A rise in yields at a 91-day treasury bill auction on Monday to yearly high of 7.6 percent showed there would be no honeymoon, Nafte said in a client note.
"Arroyo has little time to demonstrate a stronger commitment to restructuring and the skills to get Congress to support her policy programme. Given her poor track record, the burden of proof lies entirely with the president," he wrote.
INDONESIA, HONG KONG
Asia's election season is not yet over.
Indonesia holds its first direct presidential election on July 5, with polls suggesting former army general Susilo Bambang Yudhoyono could score an outright victory. If no candidate wins a majority, the top two will square off in September.
Yudhoyono, who was security minister until he resigned in March, has quickly become the favorite of financial markets desperate for a strong leader to enact the myriad reforms needed to lure foreign investment and boost growth.
"Without economic growth there will be instability, there will be terrorism, there will be violence," said Jim Castle, who runs a business information company in Jakarta.
"So it's very important that whoever wins this election makes it a priority to mobilize private capital, both domestic and foreign, otherwise no one will have the wherewithal to address the root causes," Castle told CNBC television.
One of the surprises of Asia's election year -- to some analysts at least -- is that Indonesia's polls, including a parliamentary election in April, have gone off without any breaches of the peace.
Another surprise could come from Hong Kong's elections in September, said Richard Martin, editor of the Asia Pacific Executive Brief in Sydney.
A strong showing by pro-democracy politicians hostile to Beijing could lead to a rise in political uncertainty and, in the worst case, damage China's reputation badly enough to weaken its trade and investment outlook, he said.
For Asia as a whole, though, Martin said he was cautiously optimistic that political risks would abate in the coming months as the various new governments bed down.
"By the fourth quarter, we should see equity markets rising again," he said.
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