 |
| Paul Afoko, NPP Chairmanship contender |
Mr Martin
Korsah, Director of Elections of The New Patriotic Party (NPP) has claimed that
allegations against Mr Paul Afoko, National Chairman aspirant of the party are
serious.
He did not
disclose the details of the allegations but disclosed for the first time that
state security is involved in investigating the allegations.
Mr. Korsah was speaking in an interview with
Radio Gold.
In reaction
to a threat by a youth group to subvert the party’s congress in Tamale, Mr.
Korsah said nobody can hold the party to ransom.
“Nobody is
bigger than the party, nobody can hold the party to ransom” he fumed.
He dismissed
claims that the NPP is an Akan Party.
Mr. Korsah
agreed with comments made by Mr. Dan Botwe, former General Secretary of the
party that Dr Nyaho Nyaho Tamakloe is
free to resign from the party.
Mr. Dan Botwe
also saidd that Dr Nyaho Nyaho Tamakloe is hypocritical and that his claims
that the NPP has the image of an Akan party is false
Mr. Korsah said the petition against Mr. Afoko
was properly signed by the petitioner who provided his address and is known.
He asked Mr. Afoko to call his boys to order
because they “are destroying his campaign”
Editorial
GBEVLO
– LARTEY
Since the
demolition of the tolls both at Legon a number of persons have called for the
dismissal of Lt. Col. Larry Gbelo-Lartey, National Security Co-ordinatior.
We completely
disagree.
In our view the National Security Co-ordinator
was just doing his work and he should be commended for his intervention in
removing what clearly was a public nuisance.
The
collection of the tolls at the Okponglo gate of the University was must
certainly causing needless traffic jams and the University authorities ought to
have known better.
It is the responsibility of the National
security outfit to deal with public nuisance and it has done its duty.
The Insight
commends Lt. Col. Larry Gbevlo Lartey and his outfit for a Job” well done.
Congratulations Sir!
“I WAS TREATED BADLY” AFOKO
By Ekow
Mensah
Mr Paul
Afoko, who is aspiring for the position of National Chairman of the New
Patriotic Party (NPP) says was treated badly by the vetting Committee of the
Party.
According to
him, he was treated like a prisoner or some criminal facing interrogation.
Mr. Afoko
provided details of what happened when he appeared before the Vetting Committee
in an exclusive interview with the “Daily Guide” last week.
In his view what happened at the Vetting
Committee was a deliberate set-up and it gave the impression that the Committee
is part of a conspiracy to end his Chairmanship ambition.
Mr Afoko said
in the course of his vetting he was asked to provide his address in London and
when he hesitated the vetting Committee threatened him.
For the first time, Mr Afoko revealed that he
had been asked about narcotics and an alleged conviction in England.
He insists that he has not been convicted for
any crime either in Ghana or abroad.
“I have not
even been convicted for a traffic offence” he said.
What’s Really
Happening in Venezuela?
 |
| Venezuela President Maduro |
By Chris
Gilbert
Venezuela’s
traditional “Youth Day” fell on Wednesday of last week, and President Nicolás
Maduro’s 10-month-old government had planned a sizable celebration in the
city of La Victoria (Aragua State) where exactly 200 years ago to the day the
national hero José Félix Ribas led a youth militia against the royalist army.
The celebration included new monuments, military marches, a special light show,
and performances by the youth orchestra – all in a triumphalist spirit that was
understandable given the electoral victories of last year. These victories
establish what one analyst calls “an electoral plateau” during
the upcoming two years: a period in which, without being distracted by
campaigns, the new President and cabinet can concentrate on governing until
late 2015.
Yet
on that day Maduro made a serious error of judgment. Celebrating in Aragua, he
had left his rearguard exposed in Caracas, while at the same time
underestimating the opposition’s desperation and willingness to resort to
violence. In the capital city, the opposition had organized its own youth
march, composed largely of white, middle-class students, drawn from the private
universities. Near the end of the day a group of these protesters turned
violent, attacking the Attorney General’s offices in the city center with
stones, bricks, and Molotov cocktails. When night had fallen, three people lay
dead and a great many more were wounded, among the latter a significant number
of the new human-rights-trained police.
President
Maduro’s response to these events could be called “multilevel,” but perhaps is
more accurately described as shotgun-style. He continued with the ceremonies in
La Victoria, hesitant to abandon them on short notice. Then, at around 8 pm, he
addressed the nation on television – as he would do on the following days –
indicating that those responsible for the violent acts were small fascist
groups; that there was a coup attempt in process; adding later that
the intellectual authors of the violence were the ex-mayor Leopoldo López and
to a lesser degree the congresswoman MarÃa Corina Machado. Maduro also tried to
associate the state’s response to this situation with a new government-organized
pacification movement Por La Vida y Por La Paz, that is directed against
criminal violence.
The
incongruent elements in the President’s message were readily apparent. If the
responsible parties are really isolated fascist groups, how can they hope to
carry out a successful coup d’état? Again, since the events of Wednesday
constitute political violence, why respond to it with a movement that
is specifically directed against criminalviolence? In fact, it is unlikely
that there could be a coup under way in Venezuela in the near
future, because the violent groups are too small and do not have the support of
the military (as even the Washington Post article of the
following day begrudgingly admitted). This raises the question of what the
opposition groups, who continued to create disturbances over the weekend, are
really trying to achieve.
To
answer this question one must attempt to understand both the general situation
of the country at the beginning of this new year and that of the opposition in particular.
Following its electoral defeat last December, the Venezuelan right-wing is more
divided and weaker in numbers than it has been for some time. On the other
hand, within the Bolivarian movement there is considerable discontent due to
the dire economic situation (a combined result of the global crisis and a local
economic sabotage orchestrated by the bourgeoisie). This means that the
opposition is surely thinking about the middle and long run: How to maintain
itself as a reference during the upcoming two-year plateau? Who will be its key
leaders? Is it possible to attract disgruntled Chavistas into
its flagging ranks?
From
this emerges the strategy of Leopoldo López and MarÃa Corina Machado, whom
Maduro is correct in pointing to as masterminding the violence. These two are
seasoned politicians, closely advised by the White House, and cannot be so
foolish as to suppose that the televised image of white university students
attacking the police and burning public property will become a reference for any
significant part of the Chavist majority – a majority that, however unhappy it
may be about waiting in lines to buy milk, is endowed with considerable
political consciousness. Yet these right-wing ringleaders are not mistaken in
thinking that, through violent street actions, they could salvage the
opposition as some kind of political reference, nationally and internationally,
and perhaps enhance their own leadership within its files.
They
are playing a dirty and dangerous game. If the term fascism is abstracted
from the accidental features of its historical manifestations and used more
broadly to identify a movement that captures sectors of the middle and working
class for a pro-imperialist project – a
movement that is often racist and always willing to disregard democratic
results – then President Maduro is correct in calling the key actors
on Wednesday fascists. Yet for this very reason the President is himself
embarking on a dangerous game. His idea of attracting right-wing but more
democratically-inclined forces (such as the media magnate Gustavo Cisneros) to his side
brings with it two very serious dangers.
The
first of these is that – along with Maduro’s pet project of cultivating
celebrity allies – this new move is likely to confuse his political bases.
Second and just as important, “democratic imperialisms” and “democratic
right-wingers” are extremely treacherous allies in the struggle against
fascism. History has shown that the democratic bourgeoisie is as effective as a
curse in the fight against the violent members of its own class; a curse can
deal veritable death blows – Voltaire reminds us – when accompanied by a
sufficient amount of arsenic (i.e. working class effort). It is clear that
Maduro wants to be a “normal” president: a president who inaugurates monuments,
attends religious services, and appears with the First Lady Cilia Flores.
Similarly, he wants to imitate Chávez in his last years when after many
hard-won battles the initiator of the Bolivarian process had the opposition
thoroughly in check. All this is understandable. But having the opposition
under control is not inherited with the Presidential sash, and Maduro’s wish to
be a “normal” president indicates a grave misunderstanding of his historical
moment.
All
evidence points to how the unpopular opposition, though fighting from the
ropes, is in fact thinking about the middle and long run. Maduro needs to do
the same. He has publicly called for the detention of the chief fascist
instigator López, but he needs to go further and actually detain
him (the international mass media will satanize his government
regardless). Since losing power in the short run is not really a possibility,
the real question for this still green leader of the Bolivarian process is:
After two or three years of brushing elbows with celebrities, praising
democratic businessmen, and looking for right-wing allies in the struggle
against criminal and political violence, what will be left of the firm
political base that Chávez bequeathed him, a base that is instinctively
anti-fascist and believes in socialism? Maduro has correctly named his
enemy: fascism. For that very reason he must avoid at all costs
the vacillating attitudes of the left during the Weimar Republic, which
long ago showed their tragic ineffectiveness.
Chris
Gilbert is professor of Political Science in the Universidad Bolivariana
de Venezuela.
LEE OCRAN SPEAKS TODAY
By Kwasi Kofi
Mr Lee Ocran, Former Minister of Education
will deliver a lecture at the Freedom Centre in Accra today.
The lecture
is the first in a three- part series to mark the 48th anniversary of the
overthrow of Osagyefo Dr Kwame Nkrumah.
He will speak
on “The History, February 24, Nkrumah and Ghana”.
The lecture
will be chaired by Mr. Kyeretwie Opoku Convener of the Socialist Forum of Ghana
and it is scheduled to start at 5:00pm
The second
lecture will be delivered by Dr Gamal Nasser Adam, of the University of Ghana
and would be chaired by Comrade Kwesi Pratt, Jnr. of the Socialist Forum of
Ghana.
He will speak
on “The Relevance of Nkrumah’s Economic Vision Today” on Tuesday, February 24,
2014 at 5:00 pm
The final
lecture will be delivered by Dr Yao Graham of the Third world Network on
Wednesday, February 26, 2014 also at 5:00pm
Dr Graham
will speak on “24th February, Pan- Africanism And Nkrumah Today”.
Organizer
says all Nkrumaist and progressives are cordially invited.
PRIVATISATION: Attracting
Investment Capital
A major
rationale for privatisation has been to increase government revenue and raise
capital for infrastructure development. But the increased government revenue
has often turned out to be little more than a mirage. In affluent
countries the loss of
dividends from profitable service provision,the need to
separately fund subsidies, and the cost of
controlling prices, tend to
outweigh any financial gains from the sale of the services.
In poorer nations, a major argument for
privatisation was to provide foreign capital for much-needed public
infrastructure. In these countries a lack of capital combined with subsidised
services for the very poor ensured that government owned service authorities
were debt laden. The new flood of foreign investment, however, has often not provided the much needed capital
for infrastructure expansion.
The need for
private capital has been reinforced by the new consensus of the 80s, the Washington Consensus, which discourages governments from
having balance of payment deficits. Therefore in order to service debts,
nations required “immediate current account surpluses.” This imperative was
reinforced by international organisations such as International Monetary Fund (IMF), which imposed limits on Domestic Credit
Expansion in 1976 and called for tighter budgetary controls and monetary
targets. This arrangement meant that governments were less able to fund capital
intensive infrastructure development, upkeep and renewal using government
capital raised through loans.
The private
sector has been slow to invest in new infrastructure. The World Bank's World
Bank’s Public Private Infrastructure Advisory Fund (PPIAF) admits that there
have been “no clear investment gains” from the involvement of private companies
in water provision and the Bank's Water and Sanitation Department notes that
private money has only contributed 10 percent of water and sewerage investment
in the last decade.
A private
water company has little incentive to expand water infrastructure to provide
drinking water to poor areas where householders will not be able to pay rates
that will give them a decent return on the company's investment. Consequently
not only have the larger companies such as Suez and Veolia withdrawn from water
projects in developing nations but private companies are now only participating
on water projects on the basis of fee for service with no investment
requirements on their part.
The water
connections made as a result of private investment need to be offset by the
number of disconnections that private companies have made as a result of
non-payment. “In Nelspruit and Dolphin Coast disconnections may have exceeded
new connections, and in Jakarta there is evidence that some ‘new’ households
may already have been disconnected.“
The Public
Services International Research Unit (PSIRU) found that “Only in Latin America
can the private sector be said to have contributed significantly to the extension
of water connections – and research has demonstrated that these achievements
were no better than the public sector.“ No investments have been made in South
Asia by provide companies to extend water connections. Because of misplaced
expectations that the private sector could deliver increased water supply,
foreign aid has been significantly reduced which has more than offset the
actual investments made by private water companies to this end.
“In
sub-Saharan Africa, 80 percent of the major water privatization contracts have
been terminated or are the subject of disputes
between the public authorities and the private operator over levels of
investment.“
Even in the
UK, where water prices are set on the basis of promised investment in a five
year period, actual investment often falls short. For example, in the period
2000 to 2005 “capital expenditure was 9 per cent lower than the assumptions
made when the price limits were fixed at the start of the period“. The same was
true of the preceding 5 year period.
Many forms of privatisation rely on user fees
for private company investment returns. This is particularly onerous for the
poor who cannot afford to pay the full cost of water and sewerage. In
consequence, private companies do not extend their services to poorer
neighhbourhoods where ratepayers are unlikely to be able to pay the high rates
they need to make a profit.
|
Form
of privatisation
|
Source
of company income
|
Control
over tariff structure
|
Investment
in infrastructure
|
Length
of contract
|
Control
over assets
|
|
Operation/
Management contract |
Fee for service
|
Remains with state
|
Responsibility remains with state
|
Varies
|
Remains with state
|
|
Lease/Concession
|
User fees
|
Private company with state oversight
|
Private company takes partial responsibility
|
10-30 years
|
Remains with state
|
|
Full asset sale
|
User fees
|
Private company with state oversight
|
Private company takes full responsibility
|
Permanent
|
Private company gains assets
|
Source: 'Dried Up, Sold Out: How the World
Bank’s Push for Private Water Harms the Poor'. Food & Water Watch, Washington DC., March 2009, p. 5.
In developing
nations, where sewerage is necessary to prevent cholera and diarrhoeal diseases
that kill 2 million children each year, sewerage are being held up because of
lack of public investment. Private investors are not interested in making such
investment unless ratepayers can pay full costs or governments are willing to
subsidise them. Full cost recovery from households is too expensive for poor or
even middle income neighbourhoods, as it was in developed nations when their
sewerage systems were established (many affluent nations still use taxpayer
funds to subsidise sewerage systems). However, the development banks
and other international institutions are insisting upon full cost recovery from
users, despite the unreasonableness of such a demand and the health
consequences that follow:
The private
sector has failed to deliver any significant investments in sewerage (or other
urban infrastructure) in the south in the last 15 years. By contrast, some
major developing countries are already achieving significant extensions of
sewers in cities through public finance.
In the case
of electricity, private companies can charge higher prices if electricity is in
short supply. Blackouts and price spikes increase as a result of lower reserve
levels of generation capacity caused by the perverse incentives of the market
system that give greater profits to private generating companies during times
of electricity shortages. These perverse incentives not only discourage
investment in new generation capacity but encourage withholding of electricity
during times of peak demand to send prices higher.
What is more,
it was the unwillingness of private companies to take on the risks associated
with building capital-intensive electricity infrastructure that led to
government provision of electricity in many countries in the first place. For
private companies the biggest risk in building new generation facilities is that
they will cause wholesale electricity prices to fall. In a public system, this
risk of lower returns to taxpayers who pay for the infrastructure is balanced
by the lower prices to electricity ratepayers, usually the same people.
In
Australian, the national electricity market provides little incentive for
generators to invest in new capacity because undersupply keeps pool prices high
and the standby plant necessary to ensure system reliability erodes profits.
Also, existing generators can drop prices when potential competitors are
seeking finance for generation facilities. It would take a brave company indeed
to risk investing in generating infrastructure that may be needed in three or
four years time, but that is how long it takes to get a plant up and operating.
When
bankruptcies are threatened governments have to be prepared to step in and bail
out private companies so as to secure essential public services. Taxpayers have
been caught having to bail out companies when wholesale electricity prices went
up, as in California, and when they went down, as in the UK.
The British
government was unable to stand by and watch British Energy go bankrupt leaving
its eight nuclear power plants sprinkled around the country-side, sitting idle
with no-one to decommission them. The government therefore ended up committing
some US$20 billion to rescue it, taking a 65% stake. It is now owned by French
state-owned Electricite de France (EdF).
Taxpayers
clearly get the worst of both worlds. They no longer reap dividends from public
service utilties when they are profitable, but they still have to pick up the
bill when they are not. The reason for this is simple to understand:
electricity and water are not commodities that consumers can choose to take or
leave depending on price and supply; they are essential services upon which
lives depend.
Foreign Investment
Foreign
investment is supposed to provide developing countries with much needed
capital. However, the extent to which this foreign investment makes additional
capital available for infrastructure development is questionable. Where full
privatisation has taken place, rather than financing new investments and
infrastructure, foreign direct investment (FDI) is increasingly going into mergers
and acquisitions of existing enterprises. In fact between half and two thirds
of FDI worldwide consists of such mergers and acquisitions. This has also
occurred in Asia since the Asian crisis.
A 2004 Asian
Development Bank (ADB) study of 18 Asian cities found that where water had been
privatised, in Manila and Jakarta water supply coverage, sewerage access,
investment and leakage were worse, and only revenue collection efficiency and
minimising staff were better than other cities.
|
Selected Water Indicators
|
Manila (private)
|
Jakarta (private)
|
Average of 18 cities (public)
|
|
Water Coverage (%)
|
58
|
51
|
79
|
|
Sewerage Access (%)
|
7
|
2
|
51
|
|
Non-revenue Water (%)
|
62
|
51
|
34
|
|
Capital Expend/Connection (US$)
|
18
|
47
|
88
|
Source: David Hall and Emmanuele Lobina, 'Water
Privatisation', London,
Public Services International Research Unit (PSIRU), April 2008, p. 25.
Public Services International Research Unit (PSIRU), April 2008, p. 25.
In developing
countries the money from sales of government assets usually goes towards debt
repayments whilst the private companies that do build new infrastructure bring
little new private capital, because they too borrow most of the funds from the
development banks. If these same funds were loaned to governments they would
have the funds to finance water infrastructure themselves.
In Nairobi,
Kenya, a Vivendi joint venture with an Israeli company for water supply agreed
in 1999 was repealed n 2001. The contract not only increased rates by 40% but
also required that Vivendi get 15% profit with virtually no investment, since
equipment costs and upgrades were to be paid for by the government and users.
The deal also included dismissal of 3500 workers whilst employing more highly
paid experts causing the employment bill to rise by $2.2 million.
For example,
the private consortium involved in the most expensive water privatisation, that
of Buenos Aires, only contributed $30 million out of an initial investment of a
billion dollars (see figure below).
Brazil’s debt
has continued to climb along with its dependence on foreign capital. Foreign
investors, who were happy enough to buy existing plants that had no remaining
debt so that they could make quick returns on their money, were less interested
in investing in new generation capacity, despite the price incentives provided
by the high electricity rates. They demanded that 70 percent of any new project
be financed by the Brazilian Development Bank; that the price for gas, which
they favoured as a source of electricity, be guaranteed far into the future
with long-term contracts; and that the Brazilian government take any losses
resulting from a fall in the value of the Brazilian currency against the US
dollar.
The remaining
state-owned electricity companies had sufficient financial reserves to
undertake the necessary investment, but were not authorised to do so as it
would have been contrary to the World Bank imposed privatisation programme.
Other cheaper measures such as improving transmission efficiency and energy
conservation were not taken either. The Brazilian electricity system, which had
worked reliably for decades before privatisation and had been admired and
envied for its plenitude of cheap hydro-electricity, broke down and in 2001
Brazil faced such a shortage of electricity that rationing had to be
implemented, causing economic and social disruption. Many transnational
companies withdrew from the electricity sector at this point.
When Luiz
Inacio Lula da Silva was elected he suspended privatisation of electricity in
Brazil and brought some of the distribution companies back under public
control.
Governments
usually find that privatised public services end up being more expensive for
them than financing their own schemes with loans. This is because they have to
provide “cash contributions during the construction period; subsidies during
the operation period, e.g. in the form of non-refundable grants; and a
favourable tax regime – including tax holidays, refunding of tax on construction
and operation costs.” The increasing demand for financial guarantees in terms
of government guarantees for the private company loans and guarantees of
profits (see Avoiding Risk),
also end up being very expensive to the tax payers of poor countries.
In addition,
loans to private companies are usually more expensive than loans to
governments. In 2009, following the global financial crisis, independent power producers (IPPs) were paying 3 % more in interest that
governments for loans.
The
Criminalization of Justice: Is a Policy a Law? Is Murder Murder?
 |
| US President Hussein Obama |
According to
the Associated Press:
“An American
citizen who is a member of al-Qaida is actively planning attacks against
Americans overseas, U.S. officials say, and the Obama administration is
wrestling with whether to kill him with a drone strike and how to do so legally under its new
stricter targeting policy
issued last year.”
Notice those
words: “legally” and “policy.” No longer does U.S. media make a
distinction between the two. Under George W. Bush, detention without
trial, torture, murder, warrantless spying, and secret missile strikes were illegal. Under Obama
they are policy.
And policy makes them “legal” under the modified Nixonian understanding that if
the President does it as a policy then it is legal.
Under the
U.S. Constitution, the laws of the nations in which drone murders take place,
treaties to which the U.S. is party, international law, and U.S. statutory law,
murdering people remains illegal, despite being policy, just as it was illegal
under the less strict policy of some months back. The policy was made
stricter in order to bring it into closer compliance with the law, of course —
though it comes nowhere close — and yet the previous policy remains somehow
“legal,” too, despite having not been strict enough.
Under that
previous policy, thousands of people, including at least four U.S. citizens,
have been blown to bits with missiles. President Obama gave a speech last year
in which he attempted to justify one of those four U.S. deaths on the basis of
evidence he claimed to have but would not reveal. He made no attempt to justify
the other three.
The new
policy remains that the president can murder anyone, anywhere, along with
whoever is near them, but must express angst if the person targeted is a U.S.
citizen.
The idea that
such lunacy can have anything to do with law
is facilitated by human rights groups’ and the United Nations’ and
international lawyers’ deference to the White House, which has been carried to
the extreme of establishing a consensus that we cannot know whether a drone
murder was legal or not unless the president reveals his reasoning, intention,
motivation, and the details of the particular murder.
No other
possible criminal receives this treatment. When the police read you your
rights, you are not entitled to object: “Put those handcuffs away, sir! I have
a written policy justifying everything I did, and I refuse to show it to you. Therefore
you have no grounds to know for certain that my justification is as insane and
twisted as you might imagine it to be based merely on what I’ve done! Away with
you, sir!”
The loss of a
coherent conception of law is a grievous one, but that’s not all that’s at
stake here.
Numerous top
U.S. officials routinely admit that our drone wars in the Middle East and
Africa are creating more enemies than they kill. General Stanley
McChrystal, then commander of U.S. and NATO forces in Afghanistan said in June 2010
that “for every innocent person you kill, you create 10 new enemies.” Veterans
of U.S. kill teams in Iraq and Afghanistan interviewed in Jeremy Scahill’s book
and film Dirty Wars said
that whenever they worked their way through a list of people to kill, they were
handed a larger list; the list grew as a result of working their way through
it. The wars on Iraq and Afghanistan, and the abuses of prisoners during
them, became major recruiting tools for anti-U.S. terrorism. In 2006, U.S.
intelligence agencies produced a National Intelligence Estimate that reached
just that conclusion.
We are
shredding the very concept of the rule of law in order to pursue a policy that endangers us, even as it helps to justify the erosion of our civil liberties, to damage the natural environment, and to impoverish us, as it kills many innocent people. Maybe they’ve secretly got drones
doing the thinking as well as the killing.
2014:
A Risky Year in Geopolitics?
What
are the biggest political risks for 2014?
There
are plenty of potential crises to keep us up at night in 2014. There are tensions between China and
Japan in the East China Sea and elite-level executions in North
Korea. Violence continues to worsen in the Middle East with a resurgence of a
more localized Al Qaeda, a deteriorating security environment
in Iraq, and 2014’s biggest geopolitical pivot point: the make-or-break Iran nuclear
agreement. If the P5+1 and Iran strike a deal, it would be a huge
boon for the Obama administration, but it would leave Iran economically
emboldened and looking to backstop Shia initiatives across the region, putting
it even more at odds with Saudi Arabia. A deal is, on balance, more likely than
not. But if it falls through, it means a spike in oil prices, in addition to
the likelihood that Israel strikes Iran before it can sprint to
nuclear-breakout capacity. All of these geopolitical concerns are front and
center for the coming year.
But
above all, two essential questions best categorize the major political risks of
2014. For many of the world’s predominant emerging markets, it’s an internally
focused question: How will key developing countries adapt to upcoming elections
or implement ambitious agendas—and what does it mean for their behavior beyond
their borders? For the United States, the question is externally focused. The
international community perceives America’s foreign-policy behavior as
increasingly unpredictable. Is the United States disengaging internationally? How
will policymakers define the role that the US should play in the world? Much
depends on these concerns, as America’s relationships with its allies become
increasingly fraught.
When
you add these two questions to the more conventional geopolitical security
uncertainties, there is one clear answer: the erosion of global leadership and
coordination will become more apparent and pronounced in 2014.
How will emerging markets
respond to internal challenges?
This
year, we will see domestic distractions in emerging markets, from election
cycles to unprecedented reform agendas; do not expect them to play a
significant role internationally that does not cohere with their more pressing
priorities at home. We are in the midst of a new era of political challenges
for emerging markets, as slowing growth, sputtering economic models, and rising
demands from newly enfranchised middle classes create heightened uncertainty.
As recent protests in Brazil, Turkey, Thailand, Colombia, Ukraine and Russia
have shown, new middle classes have new demands—and are willing to take to the
streets if they go unmet.
It
is in this context that six of the world’s largest emerging markets—Brazil,
Colombia, India, Indonesia, South Africa and Turkey—will hold national
elections in 2014. In all six countries, the incumbent party will have ruled
for a decade or more, but since coming to power, few of them will have faced an
electoral cycle quite like this. Political, social, and economic dynamics in
each of these countries vary immensely, but elections raise the risk of prevote
populist policymaking in all of them. As emerging-market growth wanes, many of
these countries need to implement economic reforms in order to enhance
productivity and continue enriching their citizens. But as elections loom, the
fears of politicians grow, and substantive reform of pensions, privatization,
labor markets, and taxation will stall. Nor will the outlook improve
substantially post-elections. We are likely to see second mandates of weaker
leaderships—a political environment that is by no means ideal for big-bang
reforms.
While
these six emerging markets are the most important players for the global
economic community, the emerging market elections story extends much further. A
total of forty-four democratic emerging-market countries accounting for 36
percent of the world’s population will hold national elections this year.
Growing middle classes across the emerging market space are expecting more and
better services precisely as governments’ capacity to deliver (economically and
politically) is diminishing. That leaves emerging market governments with their
hands full at home.
Among
emerging markets, Turkey is especially vulnerable in 2014. The country faces
spillover effects from the civil war in Syria and a re-emergence of the Kurdish
insurgency. More worryingly, Prime Minister Erdogan’s increasingly aggressive
behavior is a huge variable at a time when he is likely to become president.
Expect uncertainty and conflict over the division of powers between him and the
prime minister.
China,
by far the most important emerging market in the world, certainly does not face
electoral pressure; in fact, the new leadership under Xi Jinping has
consolidated power quickly and efficiently since the leadership transition in
late 2012. But China will face demands from its constituents and domestic
distractions all the same, as its economy is now undergoing a dramatic shift.
The new leadership has embraced far-reaching reform to a greater degree over
president Xi Jinping’s first year than we’ve seen in the past two decades.
Beijing will prioritize reform over more rapid economic growth in 2014, likely
focusing on reforms that address public concerns to bolster its political
strength and popular legitimacy. Expect social-policy reform at the forefront,
with energy policy as another priority. We could also see financial reform
moving more quickly than current consensus would indicate.
These
reforms constitute a huge potential positive for China’s investment climate and
potential integration into the world economy. Beijing must, however, tread
carefully: there are many dangerous moving pieces attached to the reform
agenda. There will be losers in the reform process as industries go out of
business, officials get purged, and firms come under heavy regulatory scrutiny.
If reforms move too quickly, they could destabilize the ruling party from
within, as these key stakeholders push back to protect their vested interests.
To protect against public and bureaucratic backlash, the leadership is using
anti-corruption and reeducation efforts to intimidate reform opponents within
the party while using new technologies to mitigate public dissent. But if the
reforms fail or are widely perceived to be moving too slowly, political
instability and popular protest could grow. That is only magnified by the fact
that Beijing is doing this in the context of a fundamentally changed
information environment, where the proliferation of information leaves the
ruling party more beholden to the demands of its citizens—and where rapid
shifts in popular sentiment can arise quickly and unexpectedly. Missteps could
undermine the broader reform process and the leadership itself.
If—
or perhaps, when— there are bumps in the road, Beijing will try to divert
public anger toward foreign targets. Xi Jinping’s first substantial
foreign-policy move was to announce an Air Defense Identification Zone in the
East China Sea; that caters to widespread anti-Japanese sentiment within China.
Should trouble emerge domestically, the Xi government might be willing to
deflect attention by playing up this antagonism. On the other hand, in the
longer run, if China implements its reform agenda successfully, it could
empower the regime to project its regional influence still further.
Russia
is one emerging market where, under President Putin’s rule, there is a great
willingness to intervene on the international stage—but often in unpredictable
ways. Putin remains the single most powerful individual in the world, but two
worrying trends are converging: his popularity has slipped, and after a decade
of rising expectations, Russia’s economy is stagnating. This makes Russia under
Putin, a leader unusually capable of getting big things done quickly, far less
predictable at home and abroad.
Is the United States
disengaging internationally?
As
Putin injects uncertainty by intervening abroad, the United States is doing so
as well—but predominantly by disengaging.
Some
of this decline in consistent US foreign-policy engagement is determined by
structural international changes. First, there are
too many increasingly influential countries that need to be at the table for a
negotiation to have global impact, making it more difficult to coordinate
effectively at the multilateral level. On top of this, a distracted German-led
Europe is focusing inward on economic prerogatives of repairing the eurozone
and restoring competitiveness; for foreign-policy engagement, the United States
would much prefer the more geopolitically aligned UK and France driving European
affairs. Emerging markets, particularly Russia and China, are more willing to
challenge US preferences abroad.
Some
of this new American foreign policy tack derives from tectonic shifts in the US
domestic picture. In the 2012 election, just 5 percent of voters ranked foreign
policy as their priority, and widening income inequality is persuading many
Americans that they do not share the benefits of US engagement abroad. With a
reactive, risk-averse approach to foreign policy along with a weaker second-term
foreign-policy team, the Obama administration’s preferences and recent actions
have magnified the issue considerably. The White House has made a handful of
important missteps in the last year, even if many were at least partially the
product of circumstance. The NSA scandal in the wake of the Snowden revelations
has undermined the United States around the world. The need for attention at
home amidst congressional infighting, a government shutdown, and the Obamacare
rollout fiasco has come with significant foreign-policy opportunity
cost—perhaps most importantly, Obama’s need to miss the APEC summit. Obama’s
vacillation on whether to strike Syria undermined US credibility, and when the
chance for a chemical-weapons agreement arose (thanks to an internationally
engaged Vladimir Putin...), Obama jumped at the chance to take the deal and
chalk it up as a justification for Washington remaining a spectator to the
broader civil war.
Add
all of these factors together and it seems that a perfect storm of US foreign
policy decline is brewing. A poorly defined, more risk-averse US role in the
world has allies frustrated with and uncertain about Washington’s longstanding
policy preferences and commitments. They are actively questioning some American
security guarantees and worrying about Washington’s reluctance to deploy
military, economic, and diplomatic capital.
This
new period of uncertainty for American foreign policy will impact US relations
with countries around the world—but by no means equally. Despite their consternation,
America’s closest allies don’t have viable alternatives. Mexico and Canada are
far too economically integrated with the US to effectively hedge the
relationship with outreach to other major powers. For Japan, Israel and the
UK—the United States’ preeminent ally in each of their respective regions—the
same is true strategically. As a result, they are particularly exposed in an
increasingly leaderless world order.
That’s
not the case, though, for the US’s second-tier allies, who have flexibility in
structuring their strategic partnerships. This a much larger group, including
Germany, France, Turkey, Saudi Arabia, the United Arab Emirates, South Korea,
Brazil, and Indonesia. All have governments that consider it unwise to bet too
fully on the US, and they are preparing to hedge their position by shifting
their international orientation accordingly.
The
prime example is the deterioration in US-Saudi relations. In recent months, the
Saudi leadership has rejected a seat on the UN Security Council and penned
forceful op-eds in Western publications, explaining Saudi consternation with
American policy in the Middle East—the Iran nuclear deal in particular—and the
need for Saudi Arabia to “go it alone.” The Brazilians and Germans have been
particularly vocal in their opposition to NSA practices in the wake of the
discovery that their leaders’ personal emails had been monitored by US
intelligence.
The
implications of these shifting alliances will be stark. US corporations are
primed for new challenges. Post-Snowden, American firms that rely on collecting
or sharing information, such as telecoms, banks and credit-card companies, may
encounter a more hostile regulatory environment in countries like France,
Germany and Brazil. US defense companies selling into countries such as Turkey
and the Gulf states could also find themselves on the losing end of a tilt away
from the United States. And expect Washington’s multilateral agenda to suffer,
as “coalitions of the willing” become harder to establish and important trade deals
like the Trans-Pacific Partnership and the Transatlantic Trade and Investment
Partnership lose some momentum. Confusion over US commitments will complicate
choices for countries balancing security and economic interests between the US
and China; some Asian governments may align more closely with Beijing. And as
the US is no longer perceived as a credible driver of the single global
marketplace, a weakening of international standards is likely in the years to
come. We might see faster fragmentation of the Internet, more disjointed
financial regulation, a weaker NATO, and an even more fragmented global
environment.
But
despite its waning foreign-policy engagement, the US is not in economic
decline.Investors continue to look past America’s many challenges and bet
heavily on the US economy.In fact, driven by an energy revolution,
game-changing technologies in diverse sectors, favorable demographics, and
strong underlying political and social stability, the American economic story
remains among the most dynamic and exciting in the world.The United States may
be hamstrung by issues such as its yawning gap between rich and poor and its
increasingly ineffectual secondary-education system, but for now at least,
corporate investment and international support for the US dollar remain robust.
So despite Washington’s inconsistencies on the international stage, America’s
allies—and the international community—are set to struggle with it most.
In
2014, as emerging markets look inward and American foreign policy goes wayward,
the only certainty is that international coordination is eroding. That will
generate a more volatile global landscape and unforeseen crises.
Ian
Bremmer is the president of the Eurasia Group, global research professor at New
York University and a contributing editor at The National
Interest.
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