Nelson Mandela's deteriorating health over the past year has spurred speculation about what impact his eventual death will have on South Africa. Both inside and outside the country, there is a (somewhat overblown) fear that his death will strike at the country's soul. Mandela certainly occupies a central place in the country's self-image, and his death will be an occasion for national mourning. But beyond that -- and the possible impact on approaching elections -- his passing will likely have little effect beyond accelerating somewhat the social and political trends already at play. The political dominance of the African National Congress (ANC) will continue to unravel, and South Africa will continue its rocky but ultimately stable transition to post-revolutionary politics.

Should Mandela die before the May 2014 elections, the ruling African National Congress (ANC) will exploit Mandela's golden reputation to remind voters of its liberation credentials and reinforce the message that voting for the ANC is a vote for Madiba (Mandela's Xhosa clan name). This propaganda will help shore up ANC support in the Eastern Cape, Limpopo, and North West and may even pry more votes from disenchanted urbanites and the so-called born-free generation, who are less tied to the ANC historically but who consider Mandela a national father figure. In this scenario, the ANC would garner about 60 to 64 percent of the vote, down from the 66 percent support seen in the 2009 election, but handily above the 57 to 61 percent range that would be likely without this Mandela-effect.

This electoral boost will not last long, though, and Mandela's death will ultimately hurt the ANC precisely where it may initially help: by further de-coupling the ANC from the liberation struggle and shining a spotlight on unmet economic promises and worsening corruption in the party. As a result, citizens will be even more inclined to step outside the party and its affiliated institutions -- including members of the ANC-linked Confederation of South African Trade Unions (COSATU) -- to press their demands. Popular discontent will continue to fuel and be fueled by the ANC's and COSATU's factionalism, and South Africa will see more violent strikes and "service delivery protests" in peri-urban communities. In the shorter term, the ANC's declining legitimacy will continue to dampen turnout rather than drive support for any opposition party. Over the longer-term, however -- probably by the 2024 election, but perhaps by 2019 -- it opens up space for the emergence of a viable opposition coalition.

A number of alternative political organizations will try to capitalize on the ANC's comparative decline. Middle class blacks will likely vote in greater numbers for the liberal Democratic Alliance (DA) or for the party that emerges from a potential merger between the ANC offshoot, the Congress of the People (COPE), and Mamphele Ramphele's new Agang party. Apart from the perception that the DA is still a "white party," there is little blocking a broader coalition between the DA, COPE, Agang, and perhaps the Eastern Cape/Xhosa-based United Democratic Movement, whose leader, Bantu Holomisa, has made political hay of last year's Marikana massacre. Some poorer blacks would also vote for this coalition, particularly given Ramphele's liberation credentials and Xhosa discontent with the growing Zulu influence in the ANC. This kind of formal coalition is likely by 2019. Before then, opposition parties will continue to increase legislative coordination, including ongoing efforts to secure a (sure-to-fail but symbolic) vote of no-confidence against President Jacob Zuma. 

A viable challenger on the ANC's left flank remains unlikely -- particularly because the ANC will likely move left to try counter its decline and take a more populist line on land reform and mining (two fixed assets with strong symbolic ties to the struggle against white minority rule). Zuma has effectively sidelined former ANC Youth League leader Julius Malema, and he probably does not have enough mass support or funding to launch a revival campaign from the outside. COSATU's Secretary General Zwelinzima Vavi could organize a more radical party, and efforts by Zuma's allies in COSATU to purge Vavi for his criticisms deserve close attention. Still, while Vavi is respected both inside and outside COSATU, he is not a rabble rouser like Malema, and most unionists (particularly increasing influential public sector workers) would remain inside the ANC-linked COSATU following his ouster.

The ANC itself is more likely to fracture along provincial/ethnic lines than by ideology, especially if current ANC Deputy President Cyril Ramaphosa -- a former labor leader-turned-billionaire and one of the key architects of the country's negotiated transition to majority rule -- is not elected party president at the ANC's 2017 conference. Zuma's alliance with Ramaphosa at last year's ANC national conference in Manguang was driven by political expediency, and Zuma acolytes in Kwa-Zulu Natal are already plotting to replace Ramaphosa with a Zulu candidate at the 2017 conference. If so, party factions in the Gauteng, Eastern Cape, Gauteng, Free State, and Limpopo could lead a split in the party.

Such a split and the ANC's more populist orientation represent the clearest threats to South Africa's long-term stability. Nevertheless, South Africa's strong social and economic institutions -- including a widely respected constitution, independent judiciary, adversarial media, robust civil society, large tertiary sector, independent central bank, and a prudent treasury -- will impede more radical policy shifts and facilitate reforms in the face of sustained market pressure that will accompany the economy's slow leak under the ANC. In addition, by virtue of its declining share in parliament, the ANC now cannot amend the constitution on its own, and previous attempts to significantly weaken the judiciary, media, and civil society have generally been repelled. In the same vein, established electoral, legislative, and judicial institutions will likely contain political violence and help clear the way for a more competitive political environment.

Mark Rosenberg is a senior analyst with Eurasia Group's Sub Saharan Africa practice.

Eurasia Group's weekly selection of essential reading for the political risk junkie -- presented in no particular order. As always, feel free to give us your feedback or selections by tweeting at us via @EurasiaGroup or @ianbremmer.

Must-reads

"Baby milk rationing: Chinese fears spark global restrictions"

Celia Hatton, BBC News

What's worse than glow-in-the-dark pork? The recent craze in subpar Chinese product safety standards is all about baby milk formula. 

"Murder mysteries: Official figures showing a sharp drop in China's murder rate are misleading"

The Economist

According to official statistics, the murder rate in China surged from 10,000 in 1981 to 28,000 in 2000 ... and has since dropped steadily to 12,000. Is that credible?

"The global farm grab is on"

Michael Kugelman, CNN

Seven of the countries that were ranked most food insecure in the 2012 Global Hunger Index have given up 10 percent or more of their total agricultural area. Some are calling the push to buy arable land in developing countries a new wave of colonialism. 

"Closing the Door on Hackers"

Marc Maiffret, New York Times

The debate surrounding cyber challenges has reached a fever pitch. But the blame doesn't lie solely with aggressive perpetrators or unprepared victims: The infrastructure and software itself is insecure and prone to manipulation. 

Bonus pieces

"Bitcoin Trading Boom is Bittersweet For Long-Time Traders, Who Fear Volatility Will Tarnish Currency"

Eleazar David Melendez, Huffington Post

What is this bitcoin phenomenon all about? This piece gives a good overview of the rise -- and recent fall -- in the virtual currency's fortunes. 

"These Three Countries Are Winning the ‘Game of Thrones'"

Katy Byron, CNBC

Which real-world countries are the geopolitical winners behind the Game of Thrones television show?  

A generation ago, many wondered how many years would pass before American dominance and, by extension, the clout of Western-led financial institutions like the IMF and World Bank faced a serious challenge. So far, no single rival has proved its staying power. For better and for worse, the IMF and World Bank remain core components of international politics and development. And that's what makes collective action among the BRICS-Brazil, Russia, India, China, and South Africa-so intriguing. The BRICS carry considerable weight as models for the next wave of developing countries-particularly following an American-made financial crisis and ongoing turmoil in the Europe.

It's no surprise then that plans announced last month to create a BRICS development bank have generated so much buzz. In particular, the ability of leading emerging market governments to finance big infrastructure construction projects across the developing world has interesting potential implications.

Yet, for many of the same reasons that the BRICS have so far struggled to institutionalize a working partnership in other areas, this bank will take longer to build than its architects think and will never realize the grand ambitions of its most forceful advocates. 

It's no secret that Brazil, Russia, India, China, and South Africa are home to quite different political and economic systems and face different sorts of challenges. Less well understood is the diversity of their interests in creating a bank. Questions of seed money, oversight, purpose, and where the bank might be headquartered are certain to arouse controversy.

But the larger problem is that all the BRICS except China are grappling with sharper-than-expected economic slowdowns-and Brazil, India, South Africa, and Russia are all looking to spend their revenue on infrastructure projects at home to help bolster growth. For the moment, none of them can afford to invest substantial sums to build someone else's roads, bridges, and ports.

These governments face a choice. They can contribute to a BRICS bank funded in equal (modest) parts by each member and lacks the capital to accomplish much. Or they can lend their names to a much-better funded institution that is thoroughly dominated by China.

Yes, Brazil's government is interested in promoting a South-South development strategy, but the Dilma Rousseff administration is now focused mainly on reviving domestic growth following a significant slowdown last year. Its strategy rests in part on using state development bank BNDES to fund ambitious infrastructure projects inside Brazil. If the BRICS bank can be used to finance projects outside Brazil to which BNDES is already committed, it might be useful, but don't expect the Rousseff administration to offer significant new cash commitments toward these projects.

Russia's government, also faced with sluggish growth, will talk up the need for a counterweight to U.S.- and European-dominated institutions, but tepid pledges of support for the bank from Russia's finance minister and the recent tragicomedy in Cyprus make clear that Moscow is not ready to finance its bid for greater international prestige with substantial sums of cash.

Political officials in India, where national elections loom next year, are too preoccupied with a steady stream of domestic troubles to devote much capital to a BRICS development bank, and the government remains deeply ambivalent about its often troubled relations with fast-expanding China. That's in part why India's finance minister has said that the BRICS bank will complement, not challenge, existing international lending institutions.

Then there is South Africa, a country with a growing middle class but chronic high unemployment and an economy the size of China's sixth largest province. The ruling African National Congress sees obvious value in deepening trade and investment relations with China, but its greatest near-term contribution to a BRICS development bank will probably be limited mainly to providing its headquarters a home.

Finally, the bank faces obstacles even within China, the one country than can afford to give it heft. China already has a development bank. It's the most powerful financial institution in the country, one that answers only to the State Council, giving it the status almost of a government ministry. In fact, though the China Development Bank and the China Export-Import Bank may lack the perceived legitimacy of multinational institutions, they don't lack for borrowers. Together, they already lend more to developing countries and companies -- more than $100 billion per year -- than the IMF and World Bank do, extending China's strategic influence throughout Africa and Latin America, in particular.

Why share credit and benefit for these efforts with the other BRICS, especially when the rest have so much less to contribute? And why give others a say in where Chinese funds are invested? 

All five of these governments have an interest in choreographed displays of unity and rhetorical challenges to U.S. power. But like so many other aspects of BRICS cooperation, there is less to this bank than meets the eye.

Willis Sparks is director in Eurasia Group's global macro practice.

Eurasia Group's weekly selection of essential reading for the political risk junkie -- presented in no particular order. As always, feel free to give us your feedback or selections by tweeting at us via @EurasiaGroup or @ianbremmer.

Must-reads

"Is This a Pandemic Being Born?"

Laurie Garrett, Foreign Policy

In the past few weeks in China, we've seen over 15,000 dead animals pulled out of China's polluted rivers, with vast distances between discoveries. Recently, three people have contracted a virus strain that previously did not affect humans. Explanations from government officials have been as murky as the polluted water itself. This piece doesn't claim that we can draw a firm connection between these events ... but it argues that we certainly cannot rule it out.

"Jobs Alone Do Not Explain the Importance of Manufacturing"

Scott Andes and Mark Muro, Brookings

The U.S. manufacturing sector makes up just 11 percent of the American economy -- but it represents about 60 percent of U.S. exports and 68 percent of private sector research and development. Does the rigid focus on manufacturing's job creating capabilities tell the whole story?

"Inside the cult of Kim"

The Economist

As provocations from the North Korean regime make international headlines, what is life like on the ground in Pyongyang?

"Arming for Virtual Battle: The Dangerous New Rules of Cyberwar"

Thomas Darnstaedt, Marcel Rosenbach and Gregor Peter Schmitz, Spiegel

It looks like someone's hiring: U.S. Cyber Command at the Pentagon did not exist four years ago. Today it has 900 employees. In the next few years, that number is expected to rise to 4,900.

"Hagel: U.S. ‘has grown weary of war and skeptical of foreign engagements'"

Jorge Benitez, Atlantic Council

In this collection of excerpts from Chuck Hagel's speech at the National Defense University on April 3 (full transcript here), Hagel addresses key questions: What is America's role abroad as it becomes more hesitant to engage in global affairs? How has the American military -- and the challenges it faces -- evolved since 9/11?

Monday's ruling from India's Supreme Court that Novartis could not claim patent protection for an expensive leukemia drug throws a spotlight on India's limited intellectual property (IP) protections and may constrain much needed innovation both in the health industry and the broader economy.

The court's verdict upholds language in India's 2005 patent law that says new forms of a known drug must be significantly more effective in order to win a new patent. The court's move represents a win for India's booming generic pharmaceutical industry, but it may prove a pyrrhic victory as it threatens to fundamentally limit the government's ability to improve Indian healthcare over the long term. Foreign corporations with any IP concerns will now be more careful about operating in India. The ruling could also have the unintended consequence of keeping domestic makers of generic pharmaceuticals at the lower end of the value chain. 

The verdict is in fact the latest move by Indian authorities targeting international pharmaceutical firms' IP protections in order to help lower Indian healthcare costs. But, despite the government's hostility toward their business model, research and development-focused pharmaceutical firms such as Novartis are unlikely to exit India entirely. They will, however, proceed slowly and cautiously with the drugs they introduce and the patents they file.

The government's approach will also further box Indian pharmaceutical firms into their role as producers of low-cost, low-margin generic drugs. Over the long term, many Indian companies plan to invest substantially in research capabilities in an effort to develop new treatments and move up the value chain. These firms could become victims of their own lobbying and legal successes. Indian pharmaceutical companies will find it difficult to make the transition to higher value products if their IP protections are limited.  

More broadly, the verdict could constrain innovation in other areas of the economy as well. Any firm that depends on IP may find the Indian market either unprofitable or unwelcoming (or both). A clear medium-term risk is that foreign investment in Indian research centers will also probably decline, threatening India's long-term growth. The Indian government can ill-afford to stifle the virtuous cycle of innovation if the country's economy is to provide adequate jobs, healthcare, and social opportunities for a largely disadvantaged population of 1.2 billion. 

Sasha Riser-Kositsky is a researcher with Eurasia Group's Asia practice.

Eurasia Group's weekly selection of essential reading for the political risk junkie - presented in no particular order. As always, feel free to give us your feedback or selections by tweeting at us via @EurasiaGroup or @ianbremmer.

Must-reads

"Mexico Makes It: A Transformed Society, Economy, and Government"
Shannon K. O'Neil, Foreign Affairs

There are plenty of underappreciated bright spots in Mexico. This piece gives a compelling recent economic history of the country and spells out the risks and opportunities Mexico faces today.

"Is Kurdistan the Taiwan of the Middle East?"
Kevin Sullivan, RealClearWorld

Is Kurdistan a rare winner in an ever-turbulent Middle East?

"Life After Oil and Gas"
Elisabeth Rosenthal, New York Times

How does energy use differ around the world? A staggering fact: New York State's 19.5 million residents consume as much energy as the 800 million residents in sub-Saharan Africa (excluding South Africa).

"The Middle Kingdom's Problem with Religion"
Simon Scott Plummer, Standpoint

In 2011, there were an estimated 67 million Chinese Christians and rising. Some predict that in a few decades, Chinese Christians could outnumber those in the US (there are currently 170 million and falling). How will China's religion demographics affect its development?

China-Apple-Weibo reads:

"Did China Just Declare War on Apple? Sure Looks Like It"
Gordon Chang, Forbes

"Apple in China: Unparalleled arrogance, undisclosed agenda"
The Economist

"Weibo: The Real People's Daily"
Jonathan Dehart, The Diplomat

It seems like an anti-Apple campaign is brewing in China-but who is behind it? What's the motive? Apple CEO Tim Cook's January prediction that China will become the company's largest market looks inauspicious in hindsight. One thing is for sure: social media is exploding in China and Weibo is upending the calculus of information flow and control.

Could Turkey be nearing a resolution of its Kurdish problem? The March 21 ceasefire announcement from Abdullah Ocalan, the jailed leader of the Kurdistan Workers' Party (PKK), has certainly raised hopes of a resolution. The optimism, however, masks significant obstacles, not least of which is the fact that Prime Minister Recep Tayyip Erdogan faces structural incentives that could undermine his motivation to pursue peace as strongly and urgently as might be wished. The process could easily breakdown amid recrimination and a return to violence.

Turkey's Justice and Development Party (AKP)-led government and the PKK have been negotiating for several months. The authorities have allowed some members of the pro-Kurdish Peace and Democracy Party (BDP) to visit Ocalan in jail and communicate his position to the rest of the PKK's leadership, and the broad outlines of a deal are slowly emerging. The PKK will gradually pull back its nearly 2,000 armed militants operating in Turkish territory. In the meantime, the AKP and the BDP will start negotiations on a new constitution and revisions to Turkey's legal framework needed to ensure equal treatment for Kurds. The final stage would be the normalization of relations. Both sides will continue to maintain momentum by making small-scale concessions, though significant steps will have to wait until the PKK has fully withdrawn from Turkish territory.

For both sides, a ceasefire offers significant potential benefits and little downside, at least in the near term. The Turkish population is more inclined to consider a peace deal than at any time in the past few decades. Erdogan would reap considerable electoral benefit from resolving the long-standing violence and tension (though there would be little fallout if the deal were to break down). The BDP would gain electorally for improving, even if only marginally, Turkey's legislative framework regarding the Kurdish minority. The PKK leadership would avoid fighting on two fronts simultaneously given developments in northern Syria-while also giving their militants time to recover from the effects of the violent 2012 campaign in south-eastern Turkey. And then there are more intangible factors: The PKK leaders are thought to be tired of life on the run, and Ocalan too is believed to be angling for house arrest rather than jail.

But despite the momentum and the benefits from a ceasefire, peace could founder on one of several issues. While the mood in the country is promising, there is a wide gap between Kurdish demands and what the government can realistically concede ahead of the upcoming elections. There is also a very real danger that some factions in the PKK and the broader Kurdish movement may feel betrayed by the final deal between the government and Ocalan. That disappointment could trigger a resumption of PKK insurgency.

The most immediate challenge, though, will be implementing the PKK's withdrawal without violence, particularly given that a law assuring their safety appears unlikely at this point. The Turkish military as well as nationalist groups will find it very difficult to allow armed PKK militants to simply leave for safety in northern Iraq. And the PKK will not consider giving up their weapons, especially given the situation in Syria.

Finally, there are concerns about the process. Neither the government nor the Kurdish nationalists have any real experience in handling peace talks and the compressed time frame of less than one year to withdraw troops and write a new constitution significantly increases the complexity. Similar developments in other parts of the world took many years to complete and there is no guarantee that either side will be able to manage any potential moments of tension.

Naz Masraff is an analyst with Eurasia Group's Europe practice.

Eurasia Group's weekly selection of essential reading for the political risk junkie -- presented in no particular order. As always, feel free to give us your feedback or selections by tweeting at us via @EurasiaGroup or @ianbremmer.

The theme of this week's must-reads is the US domestic picture -- whether it's immigration, the federal deficit, gay marriage, or the 2016 presidential election.

The US domestic picture

"Is it too early for 2016 polls?"

Micah Cohen, FiveThirtyEight blog, New York Times

As soon as the 2012 presidential election wrapped up, some pollsters turned their attention to 2016. Too soon? Perhaps not.

"Own goal: America's immigration rules are the opposite of what it needs"

The Economist

Today there are just 140,000 green cards per year that are tied to employment and investment. That's the same quota as in 1990, even though the U.S. population has grown dramatically since. In 2011, just 6% of all green cards were handed out "for hard-nosed economic reasons." 

"Politicians and gay marriage: profiles in calculation"

Alexander Burns, Maggie Haberman, and John F. Harris, Politico

Will March 2013 be remembered as the month when the political calculus on the issue of gay marriage fundamentally shifted? What's the underlying cause of the shift? What does it mean for policy -- and for politicians -- going forward? 

"The politics of misperception"

Garance Franke-Ruta, The Atlantic

According to the Congressional Budget Office, the U.S. is on track for the smallest federal budget deficit since 2009. But at 5.3 percent of GDP, the 2013 deficit would still be larger than in all but one year between 1947 and 2008. This article highlights three aspects of the U.S. financial picture that the American public routinely misunderstands.

A BRICS bonus

"BRICS development bank may take years"

Anita Powell, Voice of America

Can a BRICS development bank work? Or are the interests and priorities of Brazil, Russia, India, China, and South Africa simply too divergent?