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The 7 elections that will reshape the global economy

March 6, 2012: 5:00 AM ET

Leaders around the world are facing angry voters who want real change. Can they keep getting by on the same old promises, or is it time to clean house?

By Geoff Colvin, senior editor-at-large

FORTUNE -- Rarely -- maybe never -- has global leadership been more up for grabs in a single year than it is now. Seven major nations are holding presidential elections -- in chronological order, Russia, France, Egypt, Mexico, Venezuela, the U.S., and South Korea. That's a list of hot spots worldwide, without mentioning Greek elections in April or China's presumed next president, Xi Jinping (chosen without the bother of elections), assuming office in October. All elections are local, but these seven big ones will help determine what happens next on two of the world's largest issues: how quickly we'll get through the global economic funk, and whether repressing millions is still a viable strategy for national leaders.

The main issues in the established democracies -- France, Mexico, the U.S., South Korea -- are economic. That's a bit odd, since the U.S. and French economies have performed terribly in recent years while the Mexican and South Korean economies came roaring out of the global downturn. Yet voters in all four countries are unhappy about their economic situation, and in all four they face a genuine contest between candidates representing fundamentally liberal and conservative management of the economy. Much is at stake.

Mexican and Korean voters are unhappy about income inequality and corruption. French and American voters are unhappy about unemployment and stagnation. The common factor is profound dissatisfaction with the leaders they've got; opinion polls show the incumbent candidates or parties trailing in all four countries. Voters may just throw the bums out. If they do so across the board, the policy effect will be large, since these countries currently have economically conservative administrations by a ratio of 3 to 1 (the "1" being the U.S.). That ratio could flip.

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The essential issue is much different in Russia, Egypt, and Venezuela. For them, it's the very nature of democracy after a year of unprecedented popular rage worldwide. In each case the most important developments may be what happens after the elections. Egypt, the most inspiring story of the Arab Spring, cannot get its act together. The generals decreed parliamentary elections though the country still has no constitution, nor will it have one before the June presidential election. So the results may be meaningless, depending on how the constitution gets written, or if the generals seize back power. How slow a transition will Egyptians tolerate?

Egypt is, with luck, a nascent democracy. Russia and Venezuela are bogus democracies. The Russian election hasn't happened as I write this, but it will have happened as you read this. Don't worry -- I know how it turned out. In Venezuela, we can be similarly confident that Hugo Chávez, like Vladimir Putin, will use his near-dictatorial powers to ensure a win, though he faces a credible opponent. The key question is what happens then. Will Russians and Venezuelans accept their leaders' phony reelections? They've always done so, but that was before the past year of demonstrations and public anger. There's at least a chance that the people of all three nations will rise up to insist on genuine democracy.

That would be the best outcome, just as the best result in the four established democracies would be moves toward moderate, low-tax, market-friendly economic policies. Two wild cards could disrupt elections in any of these countries. One is foreign aggression. Incumbents can never appear weak in an election year, and North Korea or Iran could easily involve several of these countries in no-win conflicts. The other wild card is social media. We've seen its political power in the Middle East and Russia, but the effect is broader. In Mexico, for example, negative campaigning is illegal, but the law never contemplated social media, which are unregulated.

The last of the seven big elections will be South Korea's on Dec. 19. Assuming the Mayan calendar theorists are wrong about the world ending two days later -- personally, I will still be buying green bananas -- we'll have by then a much clearer picture of where our world is heading.

This article is from the March 19, 2012 issue of Fortune.

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About This Author
Geoff Colvin
Geoff Colvin
Senior Editor at Large, Fortune

Longtime Fortune editor and columnist Geoff Colvin is one of America's sharpest and most respected commentators on leadership, globalization, wealth creation, and management. As former anchor of Wall Street Week with Fortune on PBS, he spoke each week to the largest audience of any business television program in America. His national bestseller Talent Is Overrated: What Really Separates World-Class Performers From Everybody Else, won the Harold Longman Award as the best business book of 2009.

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