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RETURNING to Kabul after a long absence, your correspondent recalled an evening four years ago in the Afghan capital. It was spent in L’Atmosphère, a restaurant arranged around a swimming-pool and packed, as it usually was, with aid workers, contractors and spies. Cosmopolitan, high-spirited and well-paid, many had been whooping it up in Kabul for years: rebuilding Afghanistan was a blast. Against the trance music and chatter of ski trips to Bamiyan province, a wise Afghan hand looked about, and muttered: “This can’t go on.”
Most of the foreigners have left now, owing to shrinking aid budgets and rising insecurity. Those who remain mainly live in fortified compounds, invisible to most Afghans. Restaurants, bars and guesthouses have closed for want of business, especially since a Taliban suicide-bomb attack in January on another popular restaurant, Taverna du Liban, killed 18 foreigners. So thousands of cooks, drivers and translators—a source of goodwill for the chaotic international effort—have lost their jobs. “L’Atmos” is still open, but pitiably diminished; its supply of French food and wines having been withdrawn with the French peacekeepers who provided them.
The drawdown of the NATO force they were part of—from 130,000 troops a year ago to around 12,000 by the year’s end—is the main reason for the shrinking aid effort. To a degree, this represents a return to normality. With its promises of prosperity and gender equality, the reconstruction effort always appeared in pursuit of the unattainable. After the American invasion in 2001 it made vast early strides; under the Taliban, only 3% of girls went to school, now the UN estimates that more than one-third do. Yet progress has slowed considerably. Despite the intervention’s huge cost—estimated at a trillion dollars, or $30,000 for every Afghan—the country’s poverty rate has been stuck, at 36%, for almost a decade. It is even rising in places, such as north-eastern Afghanistan, which are relatively untouched by the Taliban insurgency that is ravaging most of the country.
Though generally optimistic, clued-up Afghans tend to take a more sober view of their prospects. Theirs is a violent and dysfunctional country. It is also the poorest in Asia and one of the world’s most corrupt. Despite the continuing threat of al-Qaeda, it is of diminishing interest to cash-strapped Western governments. It will take decades, not years, for the Afghans to build a half-decent state. This blast of realism would be depressing even if it did not happen to coincide with three urgent and intimately connected crises in the country’s politics, economy and security. Badly handled, these crises could reverse much of what has been achieved, or even revive Afghanistan’s grim past.
The first crisis is ebbing, at least. In September the two main disputants in June’s contested presidential election, Ashraf Ghani and Abdullah Abdullah, ended a four-month stand-off by agreeing on a power-sharing deal. This made Mr Ghani president and Mr Abdullah chief executive—in effect, prime minister. Early signs are that the pact could hold. The two men are former cabinet colleagues—respectively as finance minister and foreign minister. They share a pro-Western outlook and get on well in their thrice-weekly meetings. Neither is tainted by corruption. A healthy partnership between them could do great good; it could help reconcile Afghanistan’s deepest ethnic divide, between ethnic Pushtuns, Mr Ghani’s group, and Tajiks, who mostly support Mr Abdullah.
But it will be hard. Mr Ghani promised to form a new cabinet within 45 days of his induction, and replace other top officials from the corrupt regime of his predecessor, Hamid Karzai, in due course. That deadline has already slipped. The president is now urging Mr Abdullah to agree to a list of 15 new ministers—representing slightly over half the cabinet—ahead of a gathering of donor organisations in London on December 4th. Mr Ghani’s supporters attribute the delay to teething problems in a novel governing arrangement. It also reflects the difficulties that Mr Abdullah, in particular, faces in mollifying powerful backers. Persuading such individuals, including former Tajik warlords whose ties to the CIA allowed them to grab land and property in Kabul, to forsake the insecurity and corruption on which they have thrived will be Mr Ghani’s hardest task.
A former World Bank official, of prestigious nomadic Pushtun pedigree, Mr Ghani has the guts for it. But it is not clear, given fractures in his government and the gangsterism that infects an economy in which narcotics represent around 15% of output, whether he has the power. Unlike Mr Abdullah, Mr Ghani has no political party, which will be a disadvantage in the parliamentary elections that are due next year. To prevent his rival seizing control of parliament, Mr Ghani will continue campaigning. “I’m going to get around, it’s my lifeline,” he says, seated in the presidential palace in Kabul where Mr Karzai spent 13 years as a virtual recluse. “You know, nomads have a curse for their women: ‘May you be married in a city and live within four walls.’ The walls of this palace are not going to confine me.”
Political stability is essential not least for the economy. In the first post-Taliban decade, it grew at an annualised rate of 9%. With swelling tax receipts, government revenues rose from 3% of GDP in 2002 to a promising 11.5% in 2011. Yet two years of trepidation, over the election and insurgency, have caused economic havoc. Output is expected to grow by 1.5% this year, less than the population. As a result, the government expects a $500m hole in its budget, which it will beg donors to fill.
In Shari Now park, central Kabul, the lean times are manifest in crowds of idle men, fighting partridges, playing board-games, or staring into space. Muhammad Akram, a 47-year-old father of four playing a local form of draughts, lost his job as a guard for a German NGO two years ago. Like many of the idlers, he is a fan of Mr Ghani. “But we need jobs and security and we are waiting to see if he can deliver.”
With 400,000 new job-seekers each year, Afghanistan needs employment-generating growth. To reassure investors, Mr Ghani has promised a crackdown on corruption; he has already announced a plan to retry the main accused in the country’s biggest scam, the theft of almost a billion dollars from Kabul Bank. He also promises liberalising reforms: for example, to the land registry, in an effort to break the land mafia and spur construction. And he aims to cut spending that ballooned under Mr Karzai. “We’re paying 60,000 teachers, but we don’t know how many we actually have,” says a presidential adviser. “There could be 6,000.” Investors are encouraged. “When the private sector was getting completely fleeced under the previous government, it had no one to go to,” says Saad Mohseni, an Afghan media mogul. “We expect things to improve.”
Mr Ghani dreams of relaunching Afghanistan as a trade hub, linking Central and South Asia and the Caucasus. He has high hopes for an endeavour by Afghanistan, Azerbaijan, Georgia and Turkey to boost regional trade and infrastructure along the ancient Silk Road—or Lapis Lazuli Corridor, as he calls it, referring to the deep blue gemstone for which Afghanistan is renowned. This is excellent; but it has no chance of success while Afghanistan remains locked in its third, most painful, struggle: against the Taliban.
Bearded and undaunted
The turbaned travellers at Hada Logar, a bus-stop on the southern edge of Kabul, are arriving from a war zone. “When we see a checkpoint on the road we don’t know if it is bandits, Taliban or soldiers,” says Muhammad Akbar, a jobless man from Mr Ghani’s ancestral Logar Province. He professes no love for the militants—“people only go to them because the government is weak”—unlike one of his companions, who gives his name as Mullah. “I am for anyone who is against the enemies of Islam,” he says. “In Logar the Taliban are the people. When you enter a village, you see their white flags flying. They do not want to fight, but the country has been occupied by Jews and Christians, so their struggle is just.”
Since NATO troops withdrew from the front line in June 2013, the 350,000-strong Afghan army has shown itself capable of planning operations and fighting hard. In the past two years it has lost over 9,000 men, nearly three times the number of Western troops killed in 13 years. Considering the army was scarcely formed four years ago—America and its allies having made little effort to raise Afghan troops before then—this is impressive. But it has not stopped the insurgency spreading.
Even NATO analysts, who are considered optimistic, admit the Taliban have never been stronger. Security maps of southern, eastern and much of northern Afghanistan are coloured livid red, to denote areas of Taliban control, with seams of green showing highways and checkpoints held by the government. It is probably only a matter of time before, in remote and hostile places such as northern Helmand province, the crimson tide takes over. To prevent that, President Barack Obama is reported to be planning to extend American combat air support for the Afghans into next year.
Other sorts of reinforcement will be discussed at a meeting of NATO foreign ministers on December 2nd. Most urgently, NATO is struggling to find 4,000 non-American troops for the coming year. It is 1,200 short, with the usual suspects—such as Britain, which is providing only 300—reluctant to prolong a campaign of which voters have tired. More important, with the NATO mission scheduled to finish by the end of 2015, Mr Ghani is lobbying for an alternative form of military backup. There is talk of adding teeth to a strategic partnership between NATO and Afghanistan, which might allow Mr Obama to leave some American troops or military assets in Afghanistan even after the campaign has formally ended. Given America’s vast and continuing investment in Afghanistan—it pays most of the annual $5.5 billion Afghan defence budget—that would be wise.
It would be only a band-aid, however. There is no military solution to the insurgency, as NATO’s failure to defeat the Taliban shows. Their leadership is headquartered in Pakistan, which makes them unconquerable. Increasingly, too, much of the resistance is local; in the absence of a functioning state, illegal drugs, timber and other rackets have flourished under a Jihadist-themed cover. The peace deal that Mr Ghani hopes to negotiate with the Taliban would expose this: the fighting might stop but the racketeering would continue. It would not spare Afghans the years of violence that lie ahead.
THE killing and incarceration of people on flimsy accusations of insulting Islam has long shamed Pakistan. Hundreds, often members of religious minorities, have been ensnared by blasphemy laws that leave victims with little chance of defending themselves against malicious claims. Cowed judges are unwilling to examine evidence for fear of profanities being repeated in their courtrooms. Outside the courts, mobs can be quickly incited to acts of murder by fire-breathing mullahs.
Accusations of blasphemy soar: just one in 2011; over 100 in 2014. More than half of the 62 people murdered in the wake of blasphemy allegations since 1990 were killed in the past five years, according to figures collated by a Pakistani human-rights group that fears even to be identified. “Blasphemy” can now include spelling errors by children or throwing away a visiting-card bearing the name “Muhammad”.
On November 25th a judge in Gilgit-Baltistan sentenced the owner of Geo, Pakistan’s biggest private television channel, to 26 years in jail for broadcasting a popular Sufi song about the prophet during a light-entertainment show. (The court does not have nationwide jurisdiction, so the mogul is unlikely to ever be thrown behind bars.) The law encourages depraved vigilante attacks. In the latest, a pregnant Christian woman was beaten to death by an enraged mob.
Liberal Pakistanis blame the country’s blasphemy craze on Zia ul-Haq, an Islamist dictator who died in a plane crash in 1988. He hardened British-era blasphemy laws. Derogatory remarks about the prophet Muhammad became a capital offence. But it was his “secular” predecessor, Zulfikar Ali Bhutto, who amended the constitution to declare members of the Ahmedi minority non-Muslims even though they consider themselves such. Pakistan’s founder, Muhammad Ali Jinnah, once served as the defence lawyer for a carpenter who had murdered the publisher of a book said to be blasphemous.
No politician has been prepared to confront blasphemy since Salman Taseer, the governor of Punjab province, was killed by one of his own bodyguards in 2011. He had sparked outrage by calling for mercy for a Christian woman, Asia Bibi, who had fallen foul of what he called a “black law”. Blasphemy cases are often thrown out by higher courts, but it can take years, during which time the accused is at great risk. On November 24th Ms Bibi filed an appeal with the Supreme Court.
The police are also prey to the radicalising forces that are eating away at Pakistan. In November a man arrested for alleged blasphemy was killed by an axe-wielding policeman. The legal profession is also tainted. Lawyers greeted Taseer’s assassin at court with a shower of rose petals. It takes considerable bravery to defend someone accused of blasphemy. In May a lawyer, Rashid Rehman, was shot dead in the city of Multan for representing a man who was accused of insulting the prophet.
The country’s clerics are united in defending the existing laws. The most vociferous opponents of reform are not the Saudi-style extremists empowered during the Zia era, but Barelvis, a school of Islam that some once looked to as a moderate bulwark against extremism.
Unsurprisingly, many conclude they can cry blasphemy with impunity. In poor villages and urban slums countless vendettas can be settled in a blasphemy allegation. Almost two years after mobs burned down 100 Christian homes in Lahore the only person behind bars is the man whose alleged blasphemy triggered the riots.
“AN INVINCIBLE personality, a blessed man, he will win a big victory.” In the opinion of Sumanadasa Abeygunawardena, issued from his swish astrological headquarters in the southern port of Galle, the prospects for Sri Lanka’s president are unambiguously bright. Percy Mahinda Rajapaksa has called an election two years early, to seek an unprecedented third term. Why not? Polling will happen on January 8th, and eight is a lucky number. For Mr Rajapaksa, a Virgo, the stars are benign. Some see the president as the fulfilment of an ancient prophecy, the reincarnation of a great southern king (who also had combed-back hair and a lush moustache). He is destined to make Sri Lanka prosper, says the astrologer, and will be the best friend of Buddhism, its main religion: “There is no temple he has not visited.”
Adorned with gold rings and precious stones, Mr Abeygunawardena is in effect astrologer to the Rajapaksa court. “I very often see the president,” he says, taking a call from the office of the First Lady who wants an auspicious time for refitting a school. The Rajapaksas are superstitious. Like four brothers, and his son—important politicians all—the president, who has ruled for a decade, takes advice on such matters as when best to step outside, or on which gems or jewellery ward off bad luck. Mr Rajapaksa usually carries a cylindrical gold talisman, supposedly with powers to enchant. The astrologer scoffs at this. But he says another piece of bling—the golden amulet on a chain around the presidential neck—truly is effective.
The president has led a charmed political life and is easily the country’s most charismatic campaigner. Ordinary Sinhalese Buddhists (around 70% of the population) like his rural past and that he crushed Tamil separatists in 2009, ending nearly three decades of war. Suggestions that tens of thousands of Tamils were massacred in the process, and talk of war crimes, are dismissed as intended only to denigrate the country. Few outside the Tamil-dominated north and east hold the accusations against him. Drive along miles of new tarmac around Mr Rajapaksa’s southern home, where a big new airport and harbour have sprouted, and enthusiasm for him is obvious. Life-size placards of his grinning figure adorn highways. In Medamulana, his ancestral home, students tour a mausoleum to his family, with a waxworks and a hefty gold-plated sculpture of his father’s head. Across the country there are rebuilt railways, new houses and expanded cities.
The building splurge has piled up oodles of debt: opposition MPs say $6 billion-8 billion are owed to China alone, though details are murky. The government prefers perky economic statistics. Unemployment is low and GDP is rising fast enough for Sri Lanka next year to rank as a mid-range middle-income country with national income per person of around $4,000. Tourism blossoms and inflation has been in single digits for 52 months, exults Basil Rajapaksa, the presidential brother running the economy (doing himself down; it is actually 69 months and counting). He is “very confident” about the future. Parliament this week passed a budget crammed with goodies for voters. To the suggestion that this was brazen populism, he chortles that “all our budgets are pre-election ones”. The local World Bank office is perhaps even more gung-ho about Sri Lanka’s starry economic future.
Nor is Mr Rajapaksa shy of using the benefits of incumbency, deploying arms of government at will. A car-park in Hambantota, in the south, is crammed with hundreds of red motorbikes, pre-election gifts for local officials, a pattern repeated countrywide. In Tamil areas security men intimidate politicians and activists. Even in Colombo, the biggest city, opposition figures say they suspect spies jam their mobile phones. They are denied public spaces for rallies. Most of the press fawns on Mr Rajapaksa; television shows involving opposition figures go mysteriously off air. Both the courts and electoral commission are widely seen as partisan.
All that had pointed to an easy victory for Mr Rajapaksa. Yet those magic charms are suddenly malfunctioning. The various opposition parties have, surprisingly, come up with a credible joint candidate. Maithripala Sirisena, a minister until last week and leading light in the ruling Sri Lanka Freedom Party (SLFP), defected on November 21st with a few supporters. Ordinary Sinhalese like him, because he seems more one of them than does Mr Rajapaksa. His promise to abolish the over-strong presidency in 100 days appeals to those who fear decades of dynastic rule by the Rajapaksas. (Older SLFP leaders have long groused about misrule by “one family”.) Mr Sirisena can tap into public resentment of worsening corruption. Businesses often complain that only insiders win official contracts. Sri Lanka fell 14 places this year in the World Bank’s ranking of the ease of doing business.
Third time less lucky
Moreover, the economy is not inevitably a vote-winner. Every voter Banyan met in the south grumbled about living costs, notably about pricey rice and milk. A former two-term president, Chandrika Kumaratunga, back in Colombo to help Mr Sirisena, accuses Mr Rajapaksa of being a “racist” Tamil-hater, and adds that those official inflation figures are “trumped-up”. As for mid-income prosperity, an opposition MP says officials dare not publish a figure from a new survey of household spending showing real incomes, after inflation, up by only 3% since 2006.
Mr Rajapaksa’s popularity is slipping. The SLFP won provincial elections in the southern province of Uva in September less comfortably than expected. At the last presidential poll in 2010, soon after the war, Mr Rajapaksa took 57% of the votes (less if you accept claims of modest rigging), so not a landslide. Assume that Tamils, Muslims and Christians, who are 30% of the electorate, mostly prefer Mr Sirisena, then even a third of the Sinhalese vote could swing it in his favour. The stars still probably favour the president, but horoscopes often disappoint.
THERE is a saying in Japan that a monkey that falls from a tree is still a monkey, but a member of parliament who falls is a nobody. Apart from some opportunities in a tiny lobbying industry, there are few prospects for cast-aside politicians. So an approaching snap election on December 14th is sparking anxiety in the Liberal Democratic Party (LDP)—except, that is, among a swelling class of politicians who owe their positions in no small part to family connections.
Botchan, or well-born “brats”, are prevalent in Japanese politics. More than two-fifths of LDP legislators are occupying safe seats in the Diet, Japan’s parliament, that were once held by fathers, grandfathers, uncles or in-laws. The total number in both houses of the Diet across all parties is climbing again, after a recent sharp fall in the lower house (see chart). They have to compete for their relatives’ seats, but they are normally a shoo-in. Eight out of 19 members of the cabinet have relatives who were in the Diet or in local politics.
There are numerous advantages in taking up a family member’s position: a ready-formed electoral machine of koenkai, or local supporters, and immediate name-recognition which makes it easier to win elections. If a hereditary politician is unfortunate enough to lose office, the family’s clout in the constituency can secure a job in a local business to tide them over.
The threat of ejection every few years holds little appeal for outsiders. It is one reason why the opposition Democratic Party of Japan (DPJ), with fewer dynasties, is struggling to find enough candidates to stand in the coming election. Many Japanese had hoped that the DPJ, when it was in power in 2009-12, would ban politicians from taking over from relatives in local party branches. But it did nothing (and its first prime minister, Yukio Hatoyama, was a particularly hapless hereditary type). Now the public appears to regard the habit as a lost cause.
There are still some critics, however, including among the many LDP legislators who had to claw their way up. Yuko Obuchi, a politician who took over her seat aged 26 from her father, Keizo Obuchi, a former prime minister, resigned from the cabinet in October after a storm of criticism over infractions of political-funding rules by members of her office. But the “princess”, as she is often known, is still likely to win a sixth term next month.
Are the botchan bad for Japan? Shinzo Abe, Japan’s prime minister, has inherited the eagerness of his grandfather, Nobusuke Kishi, who was prime minister soon after the second world war, to revise the country’s American-written constitution that renounces the use of war. Many regard Mr Abe’s focus on this as a political weakness. Apart from being trapped by family preoccupations, hereditary politicians have difficulty challenging the interest groups that chose them.
Yuji Tsushima, a retired LDP politician whose son, Juji Tsushima, is the fifth generation of MP in his family, attributes his family’s influence to a decision after 1946 by his wife’s uncle, the governor of Aomori prefecture, to hand over land to grateful farm labourers. But he sees flaws in the system. Having too many hereditary politicians, he admits, “is not good”.
THE announcement on November 18th by Shinzo Abe, Japan’s prime minister, that he was calling a snap general election was made to sound a bold one. The poll would in effect be a referendum on postponing a planned second rise in the consumption tax, Mr Abe declared—as if to show that he was defying his country’s fiscal hawks. He also urged citizens to use their vote to show what they thought of his reform policies, commonly known as Abenomics, which he has presented as Japan’s only means of ending years of stagnation.
It was stirring rhetoric, yet in reality there is little call for an election just now—and little risk of Mr Abe being defeated. After the surprise news a day earlier that Japan had slipped into a technical recession over the summer, not even opposition parties now oppose delaying the tax increase. The elections will reconstitute the lower house of Japan’s parliament, the Diet. But Mr Abe’s government already wields a powerful majority in both houses that is guaranteed until 2016.
The newly published data showed that GDP had shrunk by 1.6% on an annualised basis in the third quarter (see chart). This followed a contraction of 7.3% in the second quarter that many blamed on an initial rise in the consumption (value-added) tax, from 5% to 8%, in April. That made it easy for Mr Abe to delay the next tax hike until April 2017, when nothing short of a full-blown financial crisis, he pledged, would prevent a further rise—vital, as the fiscal conservatives see it, to repairing Japan’s parlous public finances.
Many politicians are ill-prepared for the rapid-fire campaign due to unfold after December 2nd, the official start. MPs were not expecting a snap election until next summer, after a series of local polls in the spring. The news of recession certainly makes it tricky to produce a slick campaign message about Abenomics. The government had been expecting growth of around 1% in the third quarter. Politicians could then have asserted that the economy had pulled clear of the gloom that followed the first consumption-tax rise. As it is, many MPs are unsure about what to tell their local vote-winning organisations, known as koenkai, says Kotaro Tamura, a political lobbyist and former legislator in Mr Abe’s Liberal Democratic Party (LDP). The implication that the economy is too weak to stand up to a second consumption-tax rise even a year from now would appear to signal that Abenomics is failing.
Hence the immediate reaction to the news of a snap poll was one of bemusement. The public at large, as well as many in the LDP, are united in asking: why now? Polls show that there is little appetite for an election. In some constituencies LDP officials are even grumbling publicly. In Gifu prefecture, in central Japan, a party chapter adopted a formal resolution to oppose holding a national poll. It urged the government to dedicate itself to economic recovery instead of risking a political vacuum.
Mr Abe already has strong backing for delaying the tax increase, but his election may have other uses. Many Japanese hope that if he emerges, as expected, with a renewed mandate, extended for another four years, he may at last muster the courage to get on with badly needed reforms to the labour market and to Japan’s agriculture. In addition, the LDP has an asset: it can count on the opposition’s disarray.
Since its humbling defeat in 2012, the biggest group, the Democratic Party of Japan (DPJ), has struggled to find candidates foolhardy enough to stand against the LDP in the countryside. Its support has dwindled to under 10%. You might expect the DPJ to co-operate with Ishin no To (Japan Innovation Party), the next biggest in opposition. Yet Ishin no To’s more right-leaning leader, Toru Hashimoto, is resisting.
Voters’ lack of enthusiasm may not harm the LDP and its coalition partner, Komeito. Their powerful get-out-the-vote machines in December 2012 earned them 325 seats out of 480 in the lower house, giving the government a majority of 67%, even though they won fewer votes in total than in 2009, when the DPJ pulled off a landslide. Since Mr Abe’s popularity has been falling in recent months, the LDP will probably lose some of that huge haul, particularly from the proportional-representation slice of the vote, which elects 180 members. Yet if Mr Abe can limit the losses to fewer than 40 seats he will keep a satisfactory majority.
A strong result would help to strengthen Mr Abe’s position within his own party, says Kozo Yamamoto, an LDP politician who helped design Mr Abe’s economic strategy last year. This would strengthen his hand in shaking up his cabinet, which has been battered by scandals and resignations since a reshuffle in September.
But there is still a risk that opponents of Abenomics could muster enough strength to weaken Mr Abe. The loss of an election for the governorship of Okinawa on November 16th, though chiefly the result of local opposition to the American army’s outsized presence on the island chain, showed that the LDP is vulnerable.
For those hoping that a strong election result might re-energise Mr Abe’s reform agenda, it was dispiriting that he made little direct mention of reforms this week. But this may have been tactical: it might repel rural voters, for example, if he were to emphasise the need for progress in negotiations with America and other important trading partners over the formation of the Trans-Pacific Partnership, a free-trade grouping. Farmers worry that their livelihoods would suffer from the pact. A series of reform bills, including one dedicated to women’s empowerment in the economy (a cherished project of Mr Abe’s and one where much has been accomplished) now face deletion from the legislative calendar because of the looming poll.
Yet in delaying the consumption-tax rise against the wishes of the powerful finance ministry Mr Abe has shown that he can face down bureaucrats. It is inside the ministries and the LDP that he encounters the most entrenched resistance to his efforts at reform. His advisers are privately making comparisons to the decision in 2005 by a predecessor, Junichiro Koizumi, to call a snap election to seek backing for privatising the postal service. Nothing as yet suggests that December’s election will bring Mr Abe quite the mandate that Mr Koizumi won. But it would make little sense for Mr Abe to seek re-endorsement by voters unless he had a grand purpose.
WHEN Joko Widodo, Indonesia’s president, who is generally known as Jokowi, announced that petrol and diesel prices would rise by 2,000 rupiah ($0.16) per litre on November 18th, Hajji Zaenal and the world’s financial markets had opposite reactions. Mr Zaenal, who fishes for tuna and bonefish off the coast of east Java, was glum and worried. Overnight the price of filling up his 1,000-litre tank had risen by 2m rupiah.
The markets, on the other hand, were elated. Indonesia’s fuel subsidies are wasteful, expensive and poorly targeted—benefits overwhelmingly accrue to the country’s middle and upper classes, rather than the car-less poor. Between 2009 and 2013 Indonesia spent more on fuel subsidies (over 714 trillion rupiah) than it did on infrastructure and social-welfare programmes combined. Subsidies threatened to eat up more than 10% of total government spending next year, imperilling the country’s ability to pay for the ambitious and necessary health-care, education and infrastructure programmes that Jokowi promised in his election campaign. The price rise, modest though it may be, is forecast to save the government roughly 120 trillion rupiah next year.
The day after Jokowi’s announcement Indonesian stocks rose, as did the rupiah against the dollar. Indonesian sovereign-bond yields tumbled. That was not just because of the budgetary impact of this decision, sizeable though it is. The increase also showed that Jokowi had the stomach to take politically risky but economically necessary decisions—an all-too-rare trait among Indonesian politicians, and a necessary one for a president with reformist ambitions.
Fuel subsidies are popular (seemingly free money usually is), and politicians cut them at their peril. Jokowi’s predecessor, Susilo Bambang Yudhoyono, raised fuel prices in 2013. He was greeted with street protests that were tumultuous enough that when Jokowi asked him to raise prices again as he was leaving office, he demurred.
Jokowi’s announcement also sparked anger—protests, largely peaceful, broke out in cities across Indonesia, and public-bus and minivan drivers threatened to strike—but was not a surprise. Trimming the subsidies was a campaign promise. Last week his energy minister said there would be an announcement soon after the new president returned from the G20 summit in Brisbane, which ended on November 16th (see next article). His finance minister, Bambang Brodjonegro, said in Brisbane that the rise would be no more than 3,000 rupiah per litre; pegging the increase at 2,000 may have removed some of the political sting. Subsidised petrol now costs 8,500 rupiah per litre—not far off the price of higher-octane, unsubsidised petrol which, thanks to low oil prices, is selling for as low as 10,200 rupiah per litre.
Another reason markets rejoiced was the swift action of Indonesia’s central bank. To limit the inflation likely to result from Jokowi’s action, the bank raised its policy rate to 7.75% on November 18th, the first such increase in more than a year. The bank said it expected inflation to reach 8% by the year’s end, well above today’s rate of 5%. Despite the protests, Indonesians seemed largely resigned to higher prices. Even Mr Zaenal said he understood why fuel had to cost more, though now he says that he wishes the government could set the market price of fish.
WHAT would Afghanistan look like now if Ashraf Ghani, not Hamid Karzai, had been the Anglophone Pushtun promoted by America, back in 2001, to lead the country? Afghanistan’s new president, a frail figure in white salwar kameez, grins, eyes twinkling, tantalised by the suggestion. “Let’s not discuss what we cannot change,” he then says, seated, for his first interview as president, in the shoddy grandeur of his palace in Kabul. So let Banyan attempt an answer.
On the basis of his first month in office and, more important, his two years as finance minister in the government of warlords and technocrats formed after the Taliban’s fall, Afghanistan would be in much better shape than it is. That is not only because Mr Ghani achieved a lot in a short time, setting up computer systems and a single Treasury account where there had been only paper files and broken chairs. It was also because the former World Banker had a vision for how Afghanistan should seize the great opportunity, including billions in aid money, suddenly afforded it. He promoted road-building, to restore ancient trade-routes. He denounced the regional strongmen sucking up his customs revenue. He was not universally liked. He could seem arrogant and was hot-tempered; many thought him Utopian. But after Mr Ghani left the government in a huff he was badly missed.
Mr Karzai was a disaster. He offended Afghanistan’s benefactors and neighbours even as, presiding over corrupt elections and a spreading kleptocracy, he encouraged Afghans to consider their democracy a fraud. Today’s strongmen control more than border trade; they have grabbed property in Kabul worth billions of dollars, run a drugs business equal to perhaps 15% of economic output and enjoy blissful impunity—as displayed in the protracted theft of nearly a billion dollars from Kabul Bank. Despite the trillion-dollar cost of Afghanistan’s 13-year war and reconstruction, the poverty rate has been static—at around 36%—for years. That is fuel for an insurgency which, even as foreign troops withdraw, ravages the country. Mr Ghani’s plans for reforming Afghanistan were always optimistic. They might now seem fanciful.
That is even before considering the weakness of his government, which, after a dispute over the election result, Mr Ghani will preside over with his erstwhile rival and now chief executive, Abdullah Abdullah. “The risks are enormous,” he concedes. “Criminal networks pose a major challenge to the functioning of our legal economy, we have no peace, and if we fail, our people could lose several generations.” Yet Mr Ghani, who has co-written a thoughtful book on fixing failed states, relishes his task.
Given better government, he believes, most Afghans would embrace the rule of law. To that end he has ordered a retrial of the accused in the Kabul Bank heist: “I’ll put them in prison for dozens of years, and never will there be another banking crisis.” He has reformed the attorney-general’s office and set about appointing new Supreme Court judges. Bigger reforms, including to tax collection and the land registry, will follow. “Most of Kabul is informal, that is, illegal, and people in illegal circumstances are preyed upon. Our aim is not only to clean the government but make people more independent of it.”
On travels abroad he has given other clues to his plans. In Saudi Arabia he made plain that, though partly Western-educated and married to a Lebanese Christian—whom, momentously, he thanked in his inauguration speech—he is a Muslim leader. In Beijing he raised access to Afghanistan’s mineral resources and the mutual threat of jihadism; both reasons, he suggested, for China to lean on Pakistan to stop succouring the Taliban. Mr Ghani’s subsequent visit to Islamabad was a success, however. “The choice for us both is to become the Asian economic roundabout or to sink,” he says of his country’s enemy. Your columnist wondered how the Pakistanis viewed him. “As a partner and an Afghan nationalist, who’s secure in the sovereignty of his country,” he says, which is as near as he gets to knocking his predecessor.
Where Mr Karzai called the Taliban his brothers and berated the Western troops who shed much blood, including their own, Mr Ghani has signed a defence pact with America and praised the sacrifices of Western and Afghan soldiers. The Taliban are his foe—yet he promises a fresh push for a negotiated peace. “We need it, we are keen on it, and we will move in this regard.”
A merit-based failing state
These are big claims for a man battling to form a government, a deadline for the new cabinet having lapsed as negotiations between Mr Ghani and Mr Abdullah drag on. Mr Ghani retorts that relations between the two men are excellent and that 15 new ministers will be named before a conference of donor countries in London on December 4th. In due course he promises a bigger clear-out—“the government is dysfunctional. We need fresh faces”—and that his appointments will be based on “merit, inclusion, representation and gender.” Banyan suggests that leaves open a possibility of one or two villains. “I’m not preparing you for villains! I’m preparing you for a team that can function,” he says. “You know there’s a complex spatial and social balance, as Lincoln observed back when the population of the USA was 30m, the same as ours.”
That was typical Ghani—learned, right-minded and defiant; but also prone to a sort of development gobbledygook that can raise doubts about the feasibility of his plans. Perhaps it will turn out he never was the right man to lead Afghanistan. He is still irascible. Yet the cautious, court politics many of his critics advocated was exemplified by Mr Karzai. In his analysis of Afghanistan’s problems and the likeliest solutions, moreover, Mr Ghani has the advantage of being right. That is why Afghans, the subject of all manner of half-baked experiments, are right to be hopeful. In his second coming, Mr Ghani could again leave Afghanistan looking much better than when he found it.
THIS year is unlikely to be remembered fondly by Taiwan’s president, Ma Ying-jeou. He entered it with opinion polls at record lows. Spring saw students occupying the legislature for more than three weeks in protest against his efforts to forge closer ties with China; thousands took to the streets to back them. Local elections on November 29th are likely to compound his misery. Voters will choose more than 11,100 mayors, town chiefs and councillors. Prospects for Mr Ma’s party, the Kuomintang (KMT), look grim.
With presidential elections due in January 2016, the polls will be closely watched. A bad showing for the KMT would be a good presidential omen for the island’s main opposition group, the Democratic Progressive Party (DPP), which lost the presidency to Mr Ma six years ago. By then Mr Ma will have served two terms in office, so he will be constitutionally obliged to step down.
The contest for the post of mayor in the capital, Taipei, will be especially important. The city has remained a stronghold of the KMT ever since the party was forced to flee to the island from the mainland in 1949 at the end of the Chinese civil war. The DPP has won in the city only a single time: 20 years ago, when the KMT vote was split by a spin-off party. Now Ko Wen-je (pictured), an eminent surgeon who is without political experience and is running as an independent, is polling higher than Sean Lien, a scion of one of the KMT’s richest political families.
The KMT chose Mr Lien as its candidate through a ballot of its members in the capital. But many Taiwanese see him as a privileged princeling. His father, Lien Chan, is a former vice-president who has helped forge closer ties between the KMT and China. The younger Mr Lien decided to enter politics after a lone gunman shot him at an election rally in 2010. Before that he worked in business, including in investment banking—experience, he says, that will help him manage Taipei’s economy. But many of Taipei’s young people, who were out on the streets in strength during the “sunflower movement” in and around the legislature in spring, resent the business elite. Mr Ko, who is often affectionately called “Ko P” (short for professor), appeals to those Taiwanese who are fed up with bickering between the two main parties. Being a doctor (he is chairman of the traumatology department at National Taiwan University Hospital), not a politician, appears to have helped him.
The DPP decided not to field a candidate in Taipei after the party’s polls showed that Mr Ko was more popular within the DPP than any candidate it could field itself. Mr Ko appeals not only to middle-of-the-road voters, but also to some in the DPP who want formal independence for the island. Mr Ko has given support in the past to the DPP but has tried to avoid the question of independence during his campaign.
The ruling party is also lagging behind in the contest for mayor in the central city of Taichung, which it has held since 2001. In addition, it could lose an important mayoralty in Keelung, a northern port, because of a split within its camp there: a candidate ditched by the KMT is running as an independent. Meanwhile DPP candidates in the south, where the opposition is at its strongest, still enjoy comfortable support.
Being local elections, this month’s votes are more about housing and city infrastructure than relations with China. But they still hold implications for cross-strait relations. Although the DPP is more accommodating towards China than it was before Mr Ma took office, if it gains a boost, China will look askance at it.
A HEATWAVE hovered over Brisbane, the state capital of Queensland, as world leaders gathered on November 15th for a Group of 20 (G20) summit, the biggest such meeting Australia has hosted. Tony Abbott, the prime minister, had hoped to limit their talks to topics that chimed with his domestic political agenda: growth and jobs. Barack Obama, America’s president, had other ideas. On his way to the talks, Mr Obama delivered a speech to cheering students at the University of Queensland, calling on Australia to do more to tackle climate change. To rub his message in, Mr Obama worried about the “incredible natural glory of the Great Barrier Reef”, off the coast of Queensland, which is threatened by global warming.
The president’s speech was carefully calculated. Three days earlier, Mr Obama had struck a deal with Xi Jinping, China’s president, at another summit in Beijing, in which the world’s two biggest emitters of carbon set targets to lower their outputs of greenhouse gases. The deal apparently caught Mr Abbott by surprise. He had wanted to limit the G20’s climate commitments to a line about energy efficiency. But climate change dominated the Brisbane summit in the wake of Mr Obama’s proclamation that “here in the Asia Pacific, nobody has more at stake”. Few can recall such a sharp public rebuke from Australia’s main strategic ally.
Australia is responsible for about 1.5% of global carbon emissions; measured by its output per person, it is one of the highest polluters. Yet Mr Abbott has staked his political career on a combative approach to climate action. As opposition leader four years ago, he unseated his predecessor as leader of the conservative Liberal Party over a deal with the then Labor government for an emissions-trading scheme; that deal sank. Mr Abbott won power last year after waging a scare campaign against a carbon tax Labor had introduced instead; his government has since abolished it. Mr Abbott argued in Brisbane that climate talks should happen elsewhere, not at meetings of the G20.
But the summit’s climate pledges left Australia isolated. Mr Obama pointedly used his speech in Brisbane to announce a $3 billion contribution to the Green Climate Fund, a UN body to help poor countries deal with climate change. Japan, Germany and Canada also promised money.
Mr Abbott felt in warmer company after Mr Xi and Narendra Modi, India’s prime minister, left Brisbane to address Australia’s parliament separately in Canberra. As Mr Xi spoke, Australia concluded a free-trade agreement with China. It includes tariff cuts on Australian shipments of coal, demand for which in China has grown rapidly in recent years. India is also a big market. Defiantly, Mr Abbott told the G20 leaders he would be “standing up for coal”. But the summitry has left him with difficult choices over Australia’s position on global warming as countries prepare for another summit in Paris next year—devoted entirely to the climate.
FRIESIANS, Catalans, Basques and Québécois: pro-independence activists from many would-be nations were gripped by Scotland’s referendum in September on independence from the United Kingdom. Among the observer missions was the independence movement from the southern Japanese prefecture of Okinawa, which encompasses an island chain, the Ryukyus, that was its own kingdom until it was annexed by Japan in the 19th century. The interest in Edinburgh was hypothetical. Okinawan independence is not on the cards, and polls suggest no more than 5% of a population of about 1.4m support it. But like many Scots, many Okinawans are disgruntled. And as they vote on November 16th for a new governor, that could spell trouble not just for the central government, but also for America.
This is because of the dominant campaign issue: America’s military facilities on Okinawa, always unpopular for their intrusive presence and the fear that they put Okinawa on the front line of a future conflict. About half the 53,000 American troops in Japan are based on Okinawa island, the largest of the chain. The bases there occupy 18% of Okinawa’s land area, or nearly three-quarters of the American army’s overall footprint in Japan. Especially controversial is the Futenma marine air base, which is wholly surrounded by the city of Ginowan as if it were a local baseball stadium. Way back in 1996 it was agreed that Futenma would be moved. In 2006 a new site was identified at Henoko, in Okinawa’s less populated north-east. Politics impeded the move, until the current governor, Hirokazu Nakaima, who was re-elected in 2010 on an anti-Henoko platform, changed his position last year. Preliminary work has started at Henoko.
For the government of Shinzo Abe, the prime minister, putting the Futenma issue behind Japan is a priority. The American alliance has rarely mattered more to Japan, as China has sought to challenge its rule of the Senkaku islands (Diaoyu to the Chinese), some 400km (250 miles) from Okinawa. Despite ending the deep-freeze to which China had consigned Mr Abe, his encounter with President Xi Jinping in Beijing this week still looked frosty.
Some American analysts have questioned whether such a big deployment in Okinawa is necessary, yet it remains central not just to America’s defence of Japan but also to its presence in the western Pacific—and so to the “pivot” Barack Obama has proclaimed, tilting American strategic weight towards Asia. Closer to Seoul, Shanghai and Taipei than to Tokyo, and within what China calls the “first island chain” dividing it from the open Pacific, Okinawa is also close to the region’s most dangerous flashpoints: the Korean peninsula, Taiwan and, of course, the Senkakus.
By tradition, politicians in Tokyo think that Okinawa can always be bought off: per person, it gets more central-government subsidy than any other prefecture. Last year Mr Abe promised it at least ¥300 billion ($2.6 billion) every year until 2021. And his government has been pulling out the stops to help Mr Nakaima, who is 75, win re-election for a third term. The chief cabinet secretary, Yoshihide Suga, has been appointed “minister in charge of alleviating the burden of the bases in Okinawa”. Senior figures in the ruling Liberal Democratic Party (LDP) have visited to lend Mr Nakaima their support. He says Henoko is the best option for Okinawa; it could allow Futenma to be closed within five years, well ahead of the 2022 deadline agreed on with America.
Of the three candidates opposing Mr Nakaima, the most dangerous is Takeshi Onaga, until recently mayor of Naha, Okinawa’s main city. A former LDP bigwig, he led Mr Nakaima’s campaign office in 2010. He opposes Henoko, a position shared, according to a poll in August, by 80% of Okinawa’s people. And he appeals to Okinawa’s sense of its own identity. The LDP hopes it can win at the ballot for reasons that swayed many Scots to vote against independence: the economic benefits of union (though, say local officials, curfews and other rules limiting the spending of American servicemen have sharply cut the economic benefits of the bases themselves). Moreover, in theory, the prefectural government cannot stop the Henoko project anyway. It is a central-government undertaking.
It could, however, make life difficult—delaying or revoking construction permits, for example. And activists might feel emboldened if Mr Onaga won. A hardy band of now mainly elderly protesters has agitated for decades as each new perceived outrage has added to Okinawa’s “burden”: crimes, including rape, by American servicemen; environmental damage; the extension of leases to the land on which the bases sit; aviation accidents and noise; and the arrival in 2012 of Osprey aircraft with an allegedly dubious safety record. Enforcing the current 2km exclusion-zone around the site might lead to clashes with protesters, who have taken to canoes in a part of the sea to be filled in for the project.
The weight of history
One Okinawan points to an even more fundamental reason why the bases are so unpopular. At the end of the second world war Okinawa suffered invasion, unlike the Japanese main islands; today, it harbours a visceral fear of another war. In the battle with American forces in 1945 some 240,000 people died, including a quarter of the island’s civilian population. Under American administration until 1972, Okinawa has come to accept that its future is within Japan rather than as an independent state or as part of China, to which, for centuries, the Ryukyu kingdom paid tribute.
Yet a museum at a moving prefectural memorial on the island’s rugged south coast, where many Okinawans were forced to leap to their deaths, emphasises the suffering of the local population at the hands of the Japanese army as well as the invaders. Okinawans may be reconciled to being Japanese. But many feel their country has always thrown them off a cliff; American bases, rather than being a cornerstone of their defence, seem another reason why, one day, they might be attacked again.
THE prime minister, Shinzo Abe, says he has not yet decided whether or not to dissolve the Diet’s lower house and call a snap general election. But why should he even think of doing so? The most popular Japanese prime minister in recent memory, he has a mandate for reform and the coalition led by his Liberal Democratic Party has a powerful majority. With the lower-house term running till late 2016, he does not need to go to the polls. Yet rumours are rife that Mr Abe will call an election for December.
His advisers say that a decision could come as early as next week, soon after the release on November 17th of GDP figures for the third quarter. One motivation for a snap poll might be that Mr Abe’s still high popularity is starting to slide. But the chief one could be to gain public backing to postpone a planned rise in the unpopular consumption (value-added) tax, from 8% to 10%, next October. A first rise, from 5% to 8% in April, knocked the economy sideways, mocking Mr Abe’s promises to end deflation at long last and restore growth to Japan’s stuttering economy.
Formally, Mr Abe does not need an election in order to postpone the tax rise; the decision is his alone to make. Despite this, and the evidence suggesting the economy might not readily stand a second tax rise, postponing it would be tricky. The LDP would need to pass new legislation. The Democratic Party of Japan (DPJ)—which enacted legislation for the rise when it was in power in 2012, in a noble bid to control Japan’s ballooning public debt—would lambast the government for retreating. Big business and senior bureaucrats also oppose postponing a tax rise that the whole establishment came together to back.
Most concerned of all would be the Bank of Japan. On October 31st it launched a surprise expansion of its radical monetary easing when it looked like it would miss its inflation target of 2% by next year. The central-bank governor, Haruhiko Kuroda, was formerly at the Ministry of Finance, where raising the tax to bring the country’s finances back onto the path of rectitude is a quasi-religious tenet; and he may have calculated that his monetary easing gave Mr Abe the leeway to raise the tax. An ally of Mr Kuroda’s said that if Mr Abe delayed, he would lose credibility over dealing with a gross national debt that stands at over 240% of GDP.
The opposition’s deep disarray also provides an opportunity for the ruling coalition. It might even hope to hold on to its big haul in 2012 of 325 out of 480 seats. For all that they enjoyed the government’s embarrassments over scandals afflicting some members of the cabinet in recent weeks, lawmakers in the DPJ and other opposition parties are ill-prepared for a sudden election.
But what of Mr Abe’s professed determination to improve the labour market and open up closed sectors of the economy? The energies needed for a snap election might divert attention from such structural reforms. For a man with a mandate to seek a fresh one would certainly be novel. It might re-energise the reform agenda. The risk is that some plans to boost growth in the long run, promised but already overdue, remain in the starting blocks.
FOR the past quarter of a century Indian policymakers have talked of a “Look East” policy. This involves boosting trade, investment and incomes in the landlocked north-east by engaging with nearby countries. The state of Manipur, on the border with Myanmar, hopes to be India’s gateway to South-East Asia. Residents of Imphal, its capital, say that old ethnic and cultural ties mean many in Manipur feel closer to their neighbours across the border than to distant and often hostile “mainland” Indians.
The state needs a lift. Old security problems have improved a bit, especially since Myanmar and India began co-operating against rebels from each side who were seeking sanctuary on the other. India’s Assam Rifles, a paramilitary force with sweeping powers and a reputation for arbitrary violence and arrest, are less visibly deployed these days across much of the state. But Manipur residents still complain that other armed bullies, ethnic rebel groups and state-backed militias known as “village defence forces” harass them. Bitter divisions persist between three ethnic groups: Meiteis in Manipur’s main valley, and Nagas and Kukis in the hills.
Opening up to trade could help boost the economy and help stability. India’s prime minister, Narendra Modi, in Myanmar this week, is keen on building new infrastructure to speed the flow of goods. A tidy border town with Myanmar, Moreh, has been designated as a transport hub. A UN-backed effort to connect rail-freight networks in Asia, the Trans-Asian Railway, is to pass through the town on its way to Mandalay in Myanmar, nearly 500 kilometres (300 miles) to the south-east. An economics professor in the state capital says Imphal will, within five years, see a “giant leap” as new train, road, air and internet links arrive.
For starters, the state badly needs a better road to Myanmar. Driving the 100km from Imphal to Moreh takes five hours as the highway ascends from the rice paddies of the Imphal valley and twists spectacularly through the lush Chandel hills. The road is much as it was in 1942, when it was hastily built by the British, then the rulers of India and Myanmar, to help its soldiers flee advancing Japanese troops. Near the border with Myanmar it crosses a handsome, single-lane wooden bridge. The structure was intended by the British to be merely temporary.
Worse, all traffic must navigate five official checkpoints manned by the Assam Rifles. Lorry drivers have to unload entire stocks for inspection. Travellers are interrogated. Other barriers erected by village militias exist, it appears, merely to extort bribes. Few lorries ply the narrow road. Official border trade has more than doubled in recent years, but it remains sluggish. In Moreh a new “Traders’ Facility Centre” shows little sign of use. Indian rules permit only 40 items to enter nearly duty-free, among them reed brooms and betel nuts.
Informal trade looks brisker. Imphal’s market brims with cheap Chinese stuff, much of it smuggled through Myanmar. A resident complains that India’s north-east is now a “dumping ground” for cheap Chinese goods—but people seem to want them. Hotels have been built close to private hospitals to cater to medical tourists from over the border.
Moreh has a history as a meeting-place for the far-flung: Hindu and Jain temples stand near a mosque, a church, a Sikh gurdwara and even a synagogue of the Bnei Menashe, an ethnic group from the region that claims to be a lost tribe of Israel. But locals dominate the state’s trade today. That suits some businessmen who say only the Chinese would profit from a more open border. Banks lend only to the politically connected, they grumble, so Manipuris would lack credit to expand and compete with outsiders. Suspicion is understandable after a long history of isolation, conflict and misrule. But Manipur must summon up the courage to open its doors.