Seismic shifts: elections drive uncertainty around political change and (in)stability | Political Violence Special Edition 2025

With significant changes in governments across several elections in 2024, and similar shifts likely in upcoming polls in 2025, voters have signalled a desire to hold governments accountable in addressing political and economic grievances. Neo Tsotetsi discusses the implications for political and commercial stability as new governments settle into their roles.

Protesters demand housing outside Cape Town High Court

In 2024, a substantial portion of the world’s population headed to the polls as more than 70 countries held elections. Widespread frustration with global inflationary pressures and rising living costs was evident, and many election outcomes signalled electorates’ dissatisfaction with their governments’ management of these challenges. In South Africa, Japan and the UK, this contributed to significant losses for incumbent parties. Meanwhile, a similar trend threatens Canada’s Liberal Party and Germany’s traditional coalition in upcoming 2025 elections. With reconfigured governments, and greater political fragmentation, there will be uncertainty around the operational landscape and the potential for instability in the coming year.     

South Africa

United or divided

In the May 2024 parliamentary election, the ruling African National Congress (ANC) lost their majority for the first time in 30 years, forcing them into a broad coalition – the ‘Government of National Unity’ (GNU) – with nine smaller parties and their main rival, the market-friendly Democratic Alliance. Public faith in the ANC has declined since 2009 as ordinary people struggle with worsening socio-economic conditions and persistent service delivery issues, driving disruptive unrest and strikes.

With a stronger pro-business lobby in parliament, the GNU has already fostered a greater sense of optimism. Its first budget, released in October 2024, courts greater private sector investment in energy and transport infrastructure, alongside the aim of achieving three percent economic growth by 2025. However, long-held tensions between the two primary parties, and differences among coalition partners’ political and economic agendas, have already resulted in infighting. This could hinder national policy decision-making, and drive inconsistent policy implementation at a provincial level. Political infighting may also dilute potential for significant reforms; critics note, for example, that the budget signals little departure from the previous administration’s efforts, failing to address resource deficiencies in healthcare and education. Should voters view the GNU as falling short of addressing these challenges, this will sustain ongoing threats of unrest and policy deadlocks.

Japan

On a knife’s edge

After being in power almost uninterrupted since the end of World War II, the Liberal Democratic Party (LDP), led by Prime Minister Shigeru Ishiba, lost its majority following a snap general election in October 2024. Voter frustration had mounted due to rising inflation, stagnant economic growth, high energy costs and a high-profile corruption scandal that implicated 82 senior LDP lawmakers. With major opposition parties refusing to join a coalition under Ishiba, the LDP and its coalition ally, Komeito, must govern as a minority.

Ishiba has vowed to focus on consensus-building with opposition parties to further policy goals, aiming to reassure jittery investors concerned about losing much of the regulatory stability that prompted increased investment in recent years. Initial discussions have yielded promising results, including a tax reform agreement between LDP-Komeito and the opposition Democratic Party for the People to raise the tax ceiling and facilitate more even wealth distribution. However, potential for governmental instability persists. Opposition support will need to be negotiated on a policy-to-policy basis, and the factions diverge on many issues, including government spending on grants and subsidies. Disagreements could challenge the government’s ability to promote economic recovery and manage growing government debt. Caught between pressure to assuage investor concerns around policy continuity, voter demands to address economic grievances, as well as regional security challenges, there is elevated potential for government collapse should parties fail to align on critical areas.

United Kingdom

A balancing act

In the July 2024 general election, the Conservative Party lost its majority in the House of Commons for the first time since 2010 to the Labour Party, led by Prime Minister Kier Starmer. In recent years, austerity measures, the Covid-19 pandemic, Brexit and wider geopolitical developments have had wide-reaching economic consequences, including on household budgets, prompting voters to favour the prospect of greater social spending. Starmer has stated Labour’s intent to deliver sustained economic growth, as well as other goals like building 1.5 million homes, addressing underfunding and staffing shortages in the National Health Service (NHS), and achieving 95 percent clean energy by 2030.

Investor confidence has steadied with expectations of less government turbulence, greater corporate tax stability, and closer relations with the European Union. The government since announced that it secured GBP 63 billion at its October 2024 Investment Summit which will create around 38,000 jobs. However, public opinion around Labour’s performance since July 2024 has been lukewarm, with polls indicating few perceived improvements on key pledges. Many businesses have claimed a corporate tax hike will negatively impact hiring and salary increases – and while Starmer has said there are no current plans to raise taxes again, he also indicated this may change if needed. Construction skills shortages could hamper the ability to meet housing targets, while addressing the NHS crisis will require significantly more spending than the GBP 22.6 billion injection announced by Labour to achieve meaningful reforms.

 Terraced housing and a block of council flats in London

With polls showing declining public support for both Labour and Conservatives, Starmer faces the possibility of political fragmentation in the coming years, particularly if major campaign promises are unfulfilled. Already, the right-wing Reform UK party has seen support increase after Starmer’s November 2024 'Plans for Change' speech, which had intended – but largely failed – to improve confidence in the government’s agenda. In a trend largely reflective of the recent elections in which Conservatives lost much of their base to Reform, populism will continue to shape public discourse around key issues like fiscal policy, immigration, and climate goals. This will put pressure on Labour to adjust policies to retain support, and potentially contribute to existing perceptions that the party is already reneging on campaign promises. Despite Labour’s parliamentary majority, the need for a careful balancing act to appease voters while securing economic growth and stable governance is a tall order, and there are signs that these dynamics could bring more turbulence to the UK’s political landscape in the coming year than voters and investors had hoped.

Election Watch: 2025

Canada – 25 October 2025 or earlier

In September 2024, Prime Minister Justin Trudeau’s Liberal Party (LPC) minority government lost the support of coalition partner, the National Democratic Party (NDP), following disputes over strike negotiations. Already facing a low 33 percent approval rating, Trudeau’s government now rules an opposition-controlled parliament and the loss of NDP support has dealt a blow to the party’s bid for re-election. Opinion polling has signalled greater alignment with the Conservative Party, suggesting a potential loss for the LPC in October.

Germany – 23 February 2025