Monthly Archives: October 2018

After 29 years in power, Sudan’s president says he’ll stand for election – again

Sudan’s President Omar al-Bashir has confirmed that he will stand for election in 2020, despite the usual statements earlier that he would be stepping down then. For the resourceful and adaptable leader this will be the third time had he has gone back on pledges not to seek a further term, having made similar statements in 2010 and 2014. Overall, he is one of the longest-standing strongmen in Africa: his rule has lasted since he led a bloodless coup to seize power in 1989.

He does face another obstacle for now, in that he would be seeking his third term as an elected president. The 2005 constitution prevents a president serving more than two consecutive terms. The opposition umbrella group Sudan Call has launched a campaign against any move to amend the constitutional term limits.

President al-Bashir says his government is ready for the 2020 elections, having been nominated by his ruling National Congress Party in August. The ruling party has denied reports about a possible postponement to give it more time to deal with the country’s worsening economic crisis before facing voters. More recently, Sudan’s National Assembly approved a new draft election law on October 9th, arising out of a process of national dialogue on electoral reform. The proposed reforms have received a mixed reaction from opposition parties. Some of those aligned with the opposition Sudan Call may now participate in the 2020 elections, if they are satisfied that these will be conducted fairly. However another opposition coalition, the National Consensus Forces (NCF), has already said it will boycott the elections in two years’ time.

An election boycott by Sudanese opposition parties has in fact been the norm, and the opposition has remained weak and fragmented over the years. There are significant restrictions on media, with newspapers facing closures or seizure of their copies, and opposition politicians also face arbitrary detention or exile. Real power remains in the hands of the military and National Intelligence and Security Service (NISS).

Relations warming with US but worsening economic crisis

Sudan is keen to normalise its relations with the US. The US lifted some of its economic sanctions on Sudan in October last year, 20 years after they were imposed. There are clear signs of warming relations at the strategic and military level, with the recent visit to Washington of the Sudanese Chief of General Staff, where he met several intelligence and military figures. However the US has for now kept Sudan on its blacklist of states which it says sponsor terrorism, along with three other countries.

Sudan’s economy has been in crisis for some time, with inflation rising from 34% last year to an annual rate of 67% in August according to Central Bureau of Statistics. It suffered when the South – where most of the oil reserves lie – gained its independence after a long war, to become South Sudan in July 2011. Sudan benefits from payments for transporting the oil via pipelines through its territory from land-locked South Sudan to Port Sudan on the Red Sea. But oil production has declined sharply due to the civil war in the newest member of the United Nations which broke out in December 2013. Sudan has been closely involved in brokering peace talks in South Sudan (covered in this previous blog post) through the regional IGAD mechanism, despite being a former adversary of the South’s SPLM/A which fought for decades for its independence.

Khartoum is keen to see oil production restored to previous levels, and has had direct talks with the government of South Sudan and engaged in technical cooperation to re-open the damaged facilities. In September, Khartoum signed agreements with the main oil producers under which the state would receive US$14 per barrel for transporting crude oil in government-owned pipelines from production sites.

The Sudanese pound has fallen considerably in value against the dollar, with a further official devaluation of 60% in October. The shortage of foreign currency – which is acknowledged by the finance ministry – is a serious matter for a country which imports much of its food. The economic problems have been worsened by Khartoum’s debt arrears and limited access to external finance.

China has cancelled a small part of Sudan’s debt of more than US$2 billion, which Khartoum has failed to service in recent years due the economic crisis. Further debt forgiveness is expected following a package of relief for African countries announced at a summit in Beijing in September.

Indictment by the ICC

Besides holding onto power for so long, Omar al-Bashir has other claims to fame. He became the first ruling head of state to be indicted by the International Criminal Court (ICC). He is accused of crimes against humanity, genocide, and other attacks on civilians, during the war to suppress rebels seeking greater autonomy in the western region of Darfur, which broke out in 2003. An arrest warrant was issued by the ICC in 2009 but he has been able to travel freely throughout Africa, the Middle East, and Asia, where the ICC is regarded with suspicion even by those who are party to the Rome Statute which set it up in 2002. They are supposed to arrest al-Bashir, but never act on the warrant. He made an early departure from a summit of African Union leaders in South Africa in 2015 when civil society groups started a court case against their own government for not arresting him. For now, the arrest warrant does not seem to be a problem to him, and can even help to rally his supporters around the flag.

In Darfur itself, a ceasefire means there is less fighting in the region compared to the worst of the ethnic cleansing from 2004 onwards. But there are still about two million internally displaced people, most of them in Darfur itself. How these people might return voluntarily to their lands – and whether it is safe for them to do so – is one of the key questions to be addressed. The joint UN-African Union peacekeeping mission Darfur, UNAMID, is being scaled back considerably, with a view to exiting the region over the next two years. It was first deployed in 2007, and has been one the world’s largest peacekeeping missions.

Regional dimension

Omar al-Bashir is now 74 and has some health problems, but he has shown considerable skill in managing threats around him, consolidating power, and using a powerful network of economic and political patronage. That network is under greater pressure – but could also be more useful – as the economy continues to falter. The region has many security problems, not least being the war in neighbouring South Sudan which has displaced a third of the population and created famine in some parts. Egypt and Ethiopia both want Sudan as an ally in their competition for the waters of Nile, which flows through all three countries. Sudan also participated in Saudi Arabia’s military intervention in Yemen. There are many reasons for observers to follow how al-Bashir manages his latest economic and political challenges.

Latvia – President will be elected by an open vote in 2019

This post is a follow up to the debate on how the Latvian president should be elected.

The next presidential election in Latvia will be held in June 2019. According to the Constitution, the President is elected by Parliament in a secret ballot by a majority of no fewer than 51 of the 100 members of Parliament.

The mode of election and the scope of the power of the President has been debated both during the first period of independence and since then, with many expressing the willingness for the direct election of the President.

Since June 2011, 11,004 people have signed the public initiative Manabalss.lv (My Voice) for a change to introduce a directly elected president.

Meanwhile, the debate about electing the president through an open vote rather than secret ballot has been going on. Since my previous post in July, 26 people (11 509 October 18 versus 11 483 July 4) have signed the public initiative to elect the State president by an open vote of no fewer than a 51-vote majority of the members of Parliament. This number was enough to initiate changes in legislation leading towards an open vote.

At the same time, on September 20 MPs supported the idea of five MPs from the Greens and Farmers Union about direct presidential elections. 70 MPs voted “FOR”, 15 “AGAINST” and two abstained. So far, several initiatives have been submitted to Parliament for a directly elected President, but the amendments have never been examined in a parliamentary commission.

On September 26, the Legal Commission of Parliament supported the amendment for the third reading on the open vote. The amendments were supported by parliament in the third (final) reading on October 4.

Constitutional changes require a two-thirds majority of the 100 deputies. 91 MPs were registered for the vote, with 85 MPs voting “FOR”, 3 voting “AGAINST”, and no one abstaining.

To make the process of openly electing the President in Latvia, it is also necessary to amend the Law on the Election of the State president and the Parliament Order Roll. Amendments to the Presidential Election Law are included in today’s (October 18, 2018) agenda of the Parliament sitting.

State president Raimonds Vējonis did not use his suspensive veto power after the adoption of the amendments to the Constitution and promulgated the law on October 16, 2018.

The changes to the Constitution will take effect on January 1, 2019.

Finland – Political parties prepare for late spring elections

Late spring 2019 looks set to become a busy and important period for Finnish political parties. The elections to Eduskunta, the unicameral national legislature, are scheduled for 14 April, with the European Parliament elections following in late May. There is also still the chance that the first regional elections ever held in the country would take place on the same day as the European Parliament elections. However, for that to occur, the necessary legal reforms related to the reorganization of social and health services and the establishment of the new regional councils would have to be approved by the Eduskunta around six months prior to the election day. Hence the current prediction is that the regional elections will not take place in the spring.

The Finnish party system is very fragmented, with the largest party normally getting at most 20-25 % of the votes. The latest poll, conducted from 10 September to 2 October, puts the Social Democrats in the first place with 22,6 % of the vote. This would be the first time that SDP would be the biggest party since the 1999 elections, and hence also the first time that Finland would have a centre-left prime minister since 2003. The party chair, Antti Rinne, has obviously criticized heavily the contested project of reorganizing social and health services, not least on account of the reform providing a bigger role for the private sector in delivering such services. Rinne, who has a trade union background, has also together with the unions been strongly questioning the government’s policies aiming at improving economic growth and competitiveness. However, for the most part Rinne and the other opposition leaders have basically been content to sit back and let the government make its own mistakes.

The reorganization of social and health services has indeed caused serious turmoil also inside the cabinet. Basically the project is a deal between the Centre Party and the National Coalition, with the former getting the regional councils (the Centre Party is likely to perform strongly in regional elections given its often dominant role in the rural parts of the country) and the conservatives wanting to increase the role of the private sector. The two parties have been questioning each other’s commitment to the project, with particularly individual MPs of the National Coalition voicing strong public dissent of the reform as they doubt its economic benefits and also are concerned that the various constitutional constraints mean that the role of the private sector would in the end be much smaller than initially planned. According to the latest poll the National Coalition would finish second with 18,9 % of the vote, while the Centre Party would come third with 17,6 %. Apart from losing support on account of leading the government, supporters of the Centre may be worried that the party is heading in a too market-friendly direction under the leadership of PM Juha Sipilä.

The third governing party, the Blue Reform, is truly anxious as its support is only 1,1 %. The party was established following the split inside the populist Finns Party in summer 2017 when the Finns elected the MEP Jussi Halla-aho as its new leader. Halla-aho, who has been convicted in court for hate speech, and the entire new party leadership focuses strongly on immigration issues, and hence Halla-aho will no doubt make his best to push immigration to the campaign agenda. The latest poll shows the Finns Party getting 9,3 % of the vote, but one has to remember that in both the 2011 and 2015 elections the party performed much better than predicted by the opinion surveys. The Blue Reform seems to suffer from lack of credibility: the party was essentially put together by the more populist or moderate senior party figures that also were cabinet ministers, and hence many feel that they were just protecting their own ministerial positions. The Blue Reform has also been struggling to find its own niche and agenda between the more outspokenly nationalist the Finns Party and the conservative National Coalition.

The support of the Green League has declined fairly consistently over the past year. Excluding European Parliament elections, it won over 10 % of the vote for the first time in national elections in the municipal elections held in April 2017 when it received 12,5 % of the vote. The party’s popularity had been on the rise under the leadership of Ville Niinistö and peaked during the summer of 2017, with the Greens finishing even second in the polls with around 17-18 % of the vote. Touko Aalto, the new party leader, took office in June 2017 and even some leading party figures have publicly questioned Aalto’s image and leadership. The past year or so has been tough for Aalto, who has been in the headlines through his divorce, new relationship with a Green League party central office worker, and through partying shirtless in a Stockholm gay night club. Aalto’s leadership style has also been considerably more cautious than that of Niinistö, who was widely praised for his critique of the government. Aalto is currently on sick leave due to work stress and exhaustion, and it is not clear when he resumes his duties. The latest poll indicates the Green League getting 11,6 % of the vote, which would nonetheless be around three percent more than in the 2015 elections.

The Left Alliance has found an energetic new party chair in Li Andersson, and the party is doing well in the polls with 9,8 % of the vote, also almost three percent more than in the 2015 elections. Of the minor parties, the Christian Democrats would get 4,1 % of the vote and the Swedish People’s Party 3,7 %. Were these predictions to materialize, it would mean a moderate shift towards the left – but of course the right-leaning parties would still hold a comfortable majority of the seats in the Eduskunta. In terms of agenda, much depends on whether the reorganization of social and health services is indeed approved by the parliament before the elections. If it is, then there is more room for other issues such as immigration, education, or the European Union. But one thing seems fairly certain: political parties will invest most of their resources into the April Eduskunta elections, meaning that the European Parliament elections to be held in May will truly be ‘second-order’ for the party leaders.

Portugal – On the presidential use of veto powers

Portuguese President Marcelo Rebelo de Sousa has just entered the second half of his five-year term in office, providing us with the opportunity to review the way in which he has used his powers to define a specific role for the presidency. In this piece, my attention will be centred on the use of veto powers.

Veto powers are generally associated with the “pouvoir d’empêcher”, that is, the power to limit the action of the government or of its parliamentary support basis. As such, it is often assumed that its use reflects an opposition between the president and the government or the parliamentary majority. However, the political use of veto powers is somewhat more complex than this simple assertion[1]. In order to grasp the full extent of this power and its political implications, one ought to begin by reviewing the pertinent constitutional provisions.

The Portuguese Constitution of 1976, revised in the definition of presidential competences in 1982, determines in section 136 that presidents have the power to promulgate or veto legislation emanating from the government (decree-laws) or parliament (laws). In the case of decree-laws, the presidential veto is final, although the government may decide to reintroduce the same issue by means of a law voted in parliament. By contrast, vetoes applied to parliamentary laws can be superseded if some requirements are met: as a general rule, parliament must approve the vetoed bill by an absolute majority of MPs; in the case of “organic laws” (i.e., designed to lay the foundations for strategic decisions, such as the organic law of the National Health Service), external relations, limits to economic sectors (private, public, co-operative), or electoral matters, then a 2/3rds majority is required. Sections 278 and 279 deal with the possibility of presidents requesting the Constitutional Court for a decision on the constitutional conformity of any piece of legislation. If deemed unconstitutional (even if only in a specific section), then the president must veto such bill on these grounds. In this instance, the law is returned to parliament and it is either rectified by simple majority or ratified by a majority of 2/3rds of MPs (the president being obliged to sign it if ratified).

This constitutional framework should now be read in political terms. For instance: it is clear that minority governments tend to use decree-laws in order to circumvent the need for an absolute majority in the House, and seldom use the facility of transforming the legislative rule into a parliamentary law. By contrast, calling for the intervention of the Constitutional Court gives presidents an opportunity to request a 2/3rds majority which is not necessarily easy to obtain, and thus represent a very strong power of opposition. Finally, the constitutional framework does not prevent presidents from informally returning legislative acts without a formal veto assuming the prime minister will introduce some changes deemed necessary to obtain presidential agreement. All these instances suggest that the use of veto powers has a strong political nature, and that choices are present when a disagreement emerges between the president and the authors of the legislative act. Presidents may opt for stronger or softer ways to deal with such disagreements

In a recent and thorough study of the relations between Portuguese presidents and governments, Vasco Franco proposed a classification of the different circumstances in which veto power is exercised [2]. Franco proposes two ways to look at presidential vetoes. First, he suggests that vetoes may fall in three categories:

a) “constitutional” or “juridical” (when they are supported by a declaration of the Constitutional Court);

b) “political”, when it is (i) freely exercised by the president; (ii) not on grounds of constitutional non-conformity; (iii) based on an appreciation of the contents and/or the opportunity of the legislative initiative; and (iv) accompanied by a written message to the parliament or the government; and

c) “transitional” which takes place when a president actually vetoes legislation that is pending at the time of the election of a new parliament, or the appointment of a new government – in which case there is no judgement as to the merits but only to the opportunity of the acts. Although this could be considered as a form of “political veto”, it ought to be distinguished because presidents who use them – and there are plenty of examples[3]– do not necessarily pass a negative judgement on the essence of the legislative act, but rather a willingness not to limit the options of the newcomers.

In addition, Franco considers the meaning or sense of the veto, having as a reference the interests of the government. Presidential vetoes on acts emanating from parliament can thus be considered as

(i) “cooperative” in cases where a different majority was formed to approve the bill in opposition to the parliamentary basis of the government – a circumstance that may occur when the country has a minority government;

(ii) “neutral” when the veto “is irrelevant vis-à-vis the interest of the government”; and

(iii) “conflictual, when the president uses his power to oppose directly the interests of the government.

This sort of classification is important, as it defies the simple reading of veto powers as a manifestation of opposition between the president and the government. In political terms, the constitutional competence can have different readings

Turning now to President Marcelo’s two and a half years in office, the most significant aspect of his use of the veto power is that so far he has never asked the Constitutional Court for advice (both in advance of vetoing a law, or subsequently, as was often the case before him). Two reasons may explain this behaviour. Firstly, Marcelo is a professor of constitutional law, and therefore he feels very comfortable with his own reading of the problems involved in the appreciation of each bill. Self-confidence is thus a critical element to be born in mind. Secondly, the current government and parliamentary majority seem to have been careful in avoiding the course of action pursued by its predecessors, which turned the Constitutional Court into a central political player in the years 2011-2015.

Be that as it may, President Marcelo vetoed 10 bills in the last 30 months. In all instances, he issued  a “political veto”. By doing this, he offered the current government and political majority ample room to introduce changes that allowed them to overcome the presidential veto without the need of a 2/3rds majority. Nine of those ten bills have subsequently been approved after the introductions of changes suggested by the president without the need to negotiate with the opposition. This is a highly significant political stance which highlights the willingness of Marcelo to distance himself from the government on issues where he disagrees with the current majority and is closer to the values of the centre-right politics of the original political family that he respects (such as the bill on surrogate mothers or the framework for political parties’ financing) without attacking the government by trying to use “constitutional” vetoes. At the same time, he captures a centrality in the political process that had moved away from the presidency to the Constitutional Court in the years before his term.

Apart from the ten formal vetoes, by August 2018, Marcelo had returned 18 bills to the prime minister – but none to parliament. Those bills seem to have remained in a kind of limbo, as the government does not seem to have found ways to sidestep the objections of the president. Again, this form of behaviour is destined to lower potential tension between president and prime minister, and is in line with the fact that Marcelo has so far refrained from using the mechanism of a “constitutional” veto.

Many voices on the right of the political spectrum, including several in the party to which Marcelo still belongs and of which he was leader from 1996-1999, complain bitterly that he does not join in the condemnation of the left-wing government’s strategic options. However, Marcelo’s stance is the one that better suits the political culture that grants presidents with a “moderating power” and does not view them as party-based elements in the parliamentary game – a stance that was forged during Mário Soares and Jorge Sampaio terms with public applause. The very high rates of popularity of Marcelo indicate that this stance has been equally well received by the Portuguese, the consequence of which is the enlarged room for presidential intervention. Veto powers used with discretion may not be, after all, a symbol of political clashes but rather a means to implement some sort of co-governance.

Notes

[1]For a subtle discussion of veto powers as a symbol of political opposition, see Paulo José Canelas Rapaz, “O ‘veto politico’ do Presidente da República Portuguesa (1986-2013): uso e variáveis políticas”, in António Costa Pinto & Paulo José Canelas Rapaz (eds), Presidentes e (Semi)presidencialismo nas Democracias Modernas. Lisboa, Imprensa de Ciências Sociais,2017: 193-216

[2]Vasco Seixas Duarte Franco, Semipresidencialismo em Portugal: poderes presidenciais e interacção com o governo (1982-2016). PhD dissertation in Political Science, Faculdade de Ciências Sociais e Humanas da Universidade Nova de Lisboa, 2018

[3]President Ramalho Eanes used this form of veto on 32 cases that were pending in 1985 when prime minister Mário Soares was replaced by Cavaco Silva; President Sampaio used this in 18 instances in 2002 when prime minister Guterres was replaced by Durão Barroso; and again 33 times when prime minister Santana Lopes was replaced by Socrates

Gabon – Ruling party wins first round legislative elections under revised electoral code

Gabon held legislative and local elections on October 6, two years after the contested presidential poll of August 2016 that resulted in widespread violence. Results from the first round of the legislative elections were announced on October 13; results for the local polls, held in one round, are yet to be published. The ruling Gabonese Democratic Party (PDG) has already managed to secure an absolute majority in the legislature, it appears.

Opposition leader Jean Ping, who still claims he won the presidency two years ago, called for a boycott of the elections, while other opposition parties decided to participate. Recent changes to the electoral code could have justified greater optimism with regards to the opposition’s chances, compared to the 2011 elections where the opposition only won two seats.

In accordance with the new electoral system adopted following a political dialogue process in 2017, legislative polls are now held in two rounds in single-member districts, in contrast to the previously applied multi-member majoritarian vote in one round. The number of seats has been increased from 120 to 143, but their distribution is highly skewed, as demonstrated by a close analysis of the distribution of the country’s 1.8 million population across the 143 constituencies.

In the interior of the country, in provinces known to support the PDG, a deputy in the National Assembly represents a few thousand citizens or less, while in the capital Libreville and the economic center of Port-Gentil, one elected representative represents more than 58,000 and 34,000 citizens, respectively. The distribution of seats thus favors sparsely populated rural areas that have tended to support the ruling party, while the major urban areas where opposition to President Ali Bongo is concentrated are underrepresented.

A summary analysis of the results published by the Gabonese Center for Elections (CGE) indicates that the PDG won 74 seats in the first round, while opposition parties followed far behind with only four seats, and independents won two. The three former opposition parties that decided to join Ali Bongo’s unity government following the 2017 political dialogue – the Social Democratic Party (PSD), the New Democracy (DN) and the Party for Development and Solidarity (PDS) – were particularly hard hit, winning only 1 seat among them. That seat went to the PSD in the province of Ogooué-Ivindo which is otherwise a PDG stronghold. The runoff for all remaining seats is scheduled for October 27.  

The gamble by opposition leaders who disassociated themselves from Ping and decided to participate in the elections may not have paid off directly. Former president of the National Assembly Guy Nzouba-Ndama, leader of the recently formed Democrats (Les Democrates – LD) party was eliminated in the first round by a PDG candidate; his party managed to win three seats in the first round of polling. Alexandre Barro Chambrier, leader of the Rassemblement Heritage et Modernite (RHM), heads to the second round, also running against a PDG candidate. His party won one seat in the first round, in the Moyen-Ogooué province. In a particularly surprising development according to CGE results, the Ogooué-Maritime province where Port-Gentil is located has swung from voting for the opposition in the 2016 presidential election to giving the PDG eight out of 13 seats in the first round.

Remains to be seen if opposition parties can coalesce and effectively mobilize voters behind the remaining opposition candidates in the runoff races – assuming the competition is fair. Some opposition candidates alleged voting irregularities in the first round, and there have been fraud accusations – including between the PDG and one of its allied parties, the Center of Liberal Reformers (CLR).

There are close to 30 races where an opposition candidate is on the second round ballot – from the LD, RHM and other parties – which creates an opening for a more representative legislature. It is striking to note, however, that in some opposition strongholds turnout was reportedly significantly lower than in provinces in the interior of the country, notably those that have traditionally been PDG strongholds. Thus while the average turnout in the first round was 58.6% nationally, in the Estuaire province where Libreville is located, only 28.5% of voters turned out to vote. Get-out-the-vote efforts should be a priority for candidates proceeding to the second round. In a country like Gabon with a small electorate, it is particularly true that every vote counts. 

El Salvador – Choosing China over Taiwan: Presidential powers and geopolitics in Central America

Last 20th August, the President of El Salvador, Salvador Sánchez Cerén, announced that his government was breaking off diplomatic relations with the Republic of China (herein forth Taiwan or the ROC) to establish them with the People’s Republic of China (China or PRC). This is the latest in a series of diplomatic defeats for the ROC, a country struggling to maintain sovereign state recognition among a few developing small states, against the will of the Chinese government who insists that Taiwan is a renegade province, and countries cannot maintain diplomatic relations with both at the same time. This is also known as the One-China policy. The Salvadoran switch takes place at the time that the PRC gradually seeks to establish itself as a hegemonic power on the international stage, while the current United States government holds a commercial war with the Chinese. Central America is quite in the middle of this game of great powers (and in the Caribbean, in 2017, the Dominican Republic also chose China over Taiwan).

In this post, I focus my analysis on the six presidential polities located in the Central American isthmus (Costa Rica, El Salvador, Guatemala, Honduras, Nicaragua, and Panama), particularly, El Salvador. Besides this country two other states have established diplomatic relations with the PRC: Costa Rica, in 2007, and Panama, in 2017. It has also been speculated that the Honduran government might, in the short term, do the same. In this post I discuss how foreign policy decisions are a presidential power, which is affected by domestic politics and, particularly for small countries in strategic locations, the influence of great international powers.

A convenient way to characterize this situation is as a two-level game model, where domestic politics interact with international politics. I seek to answer, why Central American countries are cutting diplomatic ties with the ROC? Why they had them in the first place? Will more countries in this region do the same? And, does the current US-China trade war have anything to do with all this?

Foreign policy presidential powers in Central America, and the Beijing or Taipei dilemma

The countries of the Central American isthmus, except for Belize, have in common that all of them have a presidential form of government. This is, presidents and members of the legislature are elected for fixed terms, and cabinet members in the executive are not accountable to the legislature. Foreign policy is often characterized as a presidential power, not only in this region of the world but elsewhere, where polities have adopted presidentialism or some sort of semi-presidentialism. Very much like in the United States, in Central American countries foreign policy is a presidential prerogative, subject to checks-and-balances whose limits often fall into grey areas of constitutional interpretation. Yet, it is at the discretion of the president to recognize the sovereignty of other states.

The way presidents handle the international relations of their nations are not free from controversy. After the PRC became one of the permanent members of the United Nations Security Council in the early 1970s, most Latin American states except for the Central American and the Caribbean ones broke diplomatic ties with the ROC to establish them with China. Colin R. Alexander (China and Taiwan in Central America: Engaging Foreign Publics in Diplomacy. London: Palgrave MacMillan, 2014), provides an explanation of why this subgroup of nations in the Americas maintained diplomatic recognition of Taiwan over China. This is partly explained by the close ties between the government in Washington D.C. and the government in Taipei (the capital of the ROC) that was forged during the Cold War. On the one hand, it is well known that the Taiwanese government grants substantial donations for international development to governments of the few states that still recognize it as a state.

On the other hand, much is speculated about some other donations being granted informally, without going through public controls. Less evident is that, according to Alexander, among diplomatic circles in Taiwan there is talk that the United States government also makes informal donations to the governments of the Caribbean and, possibly, some Central American ones as well—i.e. countries within their geographical area of ​​influence—in order to persuade them to keep recognition of the Asian island: “it has long been suspected that the US government provides financial incentives, aid, and development assistance to its neighbors based on informal agreements that they will continue to recognize the ROC” (p. 30).

Therefore, for Central American governments there are strong historical, political and financial incentives to maintain diplomatic ties with the ROC. However, that scenario has been changing due to the PRC’s stronger role in international trade, but also because it is competing with Taiwan with a diplomacy of development aid to extend its own influence—a so-called dollar diplomacy—hence weakening the Taiwanese in Central America. In 1985, due to the ideological context of the time, the Sandinista government of President Daniel Ortega in Nicaragua gave China diplomatic recognition. Ortega’s policy towards China was abolished by the new Nicaraguan government in the early 1990s, while diplomatic relations with ROC were restored. Years later, when Ortega competed again in the 2006 elections, with clear chances of winning, he hinted to the possibility of reestablishing relations with Beijing. Nonetheless, he did not do it. It was another former president of the 1980s, Óscar Arias (1986-1990, 2006-2010), from Costa Rica, the first in Central America in breaking with Taipei over Beijing, in this new context of international relations.

Arias returned to office in 2006 and a year later, amid great secrecy, his government announced that it was diplomatically recognizing the PRC. While there was controversy at that time about this move, as one observer points out, Costa Rica—a more open economy to international markets, with a higher per capita income than its Central American neighbours—was exporting more to China than to Taiwan, and was less dependent on official development aid than its neighbours. Hence, strategically, it was probably more natural for this country to establish this diplomatic policy which came with additional benefits, such as official aid for infrastructure and investment agreements.

However, Chinese investment in other parts of Central America has increased considerably in recent years. On the one hand, this is the result of the growing investment of that country in different parts of Latin America. The investment of this Asian state is concentrated in the countries of the Southern Cone. Some analysts believe that this behaviour is partly explained by Beijing’s interest to consolidate itself as a global hegemon, although this is also due to its need for raw materials to sustain its economic growth, and the expectation to profit from some of its investments (Constantino Urcuyo, China y EE. UU. Geopolítica y estrategia en el siglo XXI, forthcoming). In Central America, the geostrategic interest of this region for the United States must be taken into account, and that this is one of the few strongholds Taiwan has left.

Political scientist Constantino Urcuyo (see last paragraph) argues that, although China has not invested in this region in the same proportion as it has in the Southern Cone, the Central American isthmus is of great economic importance for Beijing, as it connects through the Panama Canal the Pacific and the Atlantic oceans and is a transit area for Chinese trade to North America. He also adds that politically, until 2016, China and Taiwan were experiencing a truce in their diplomatic efforts regarding the One-China policy. However, since Tsai Ing-wen’s rise to the presidency of Taiwan, China has taken a more aggressive diplomatic stance seeking to weaken the former internationally.

Panama has become the largest destination for Chinese investments in Central America. This country is in fact part of the Silk Road strategy that the Chinese government promotes mainly in Asia and Africa. In Honduras, Chinese money builds a dam of strategic importance for development plans in that country. The Honduran government of Juan Orlando Hernández has also sought to attract more investment from that Asian country for other projects such as the establishment of a so-called Zone for Employment and Economic Development. Finally, it has been argued that one reason that could explain El Salvador’s decision to establish diplomatic relations with China was Taiwan’s refusal to build a seaport. The agreement with China includes investment in this regard.

¿Is Donald Trump’s presidency a revival of the Monroe Doctrine?

The Monroe Doctrine, named after the United States President James Monroe in 1823, saw the intervention of Europeans in the Americas as acts of aggression. Years later, it is accentuated under the presidency of Theodore Roosevelt who would justify the direct intervention of the United States in the politics of the Latin American states. It is well known the influence that the United States had in countries such as Cuba, Honduras, Nicaragua, and Puerto Rico during the first decades of the 20th century.

The United States has been observing with great suspicion the growth of the Chinese presence in the Americas. However, possibly under the Trump administration the verbal confrontations of the United States towards China have grown. Recall that even though he had not assumed, the newly elected president made an official call to the Taiwanese President, Tsai Ing-wen’s, in November 2016, breaking protocol in a confrontational attitude against China. Trump has also launched a trade war this year with countries of the European Union, Canada and Mexico. But, possibly it is with China the country with whom this type of confrontation has been more aggressive, due to the tit-for-tat tariff escalation both parts have embraced with. However, this factor may not be related to the diplomatic rupture of El Salvador with Taiwan.

The Obama administration declared the end of the Monroe Doctrine’s era (Urcuyo, forthcoming); however, under Trump’s government the Secretary of State, Rex Tillerson, on one occasion, in reference to the Chinese presence in the American continent, declared that the Monroe Doctrine was a success back in the day, asserting that “I think it’s as relevant today as it was the day it was written”.

The intervention of the United States in Central America is subtler in comparison to what it was even in more recent times, during the Cold War. Faced with the growing Chinese investment in the region, Trump’s government has threatened that will condition its economic support upon their maintenance of diplomatic ties with Taiwan. It did after the breakup of Panama with Taiwan in 2017, and it reiterated this a few days ago after El Salvador did the same last August. Mainly, for the countries of the Northern Triangle, the United States’ aid may be more important, due to their higher levels of poverty compared to their Central American neighbours.

An additional factor that affects the countries of the Northern Triangle in their relationship with the US is that they are expellers of migrants and their economies are very dependent on the remittances they send to their families. This factor has been changing since the Obama administration at the beginning of this decade, among other factors, due to their growing crime rates and political instability, which is why the US has tightened its border control and deportation policies.

The two-level game of the Salvadoran diplomatic switch

For the Salvadoran President, Salvador Sánchez Cerén, the decision to maintain relations with Taiwan or to establish them with China represents what Robert Putnam characterizes as a two-level game, where the government has to manage a simultaneous strategy to manage the conflict in national politics and international politics.

Sánchez Cerén has been elected president of a leftist party, the former guerrilla in the 1980s, Frente Farabundo Marti para la Liberación Nacional (FMLN). El Salvador is also in a serious fiscal crisis and since the arrival of Trump has sought to relax its position, albeit unsuccessfully, on the policy of mass deportations. Hence, international aid is a significant incentive. However, Trump has been quite derogatory with El Salvador. Recall that in January 2018 Trump called “shitholes” El Salvador, Haiti and other African nations. Obviously, this was very offensive for Salvadorans.

On the other hand, it is known that Taiwan manages its own lobby groups in the countries where it has a diplomatic presence. This explains the secrecy of the negotiation between El Salvador and China.  However, once the government’s decision to recognize China and break with Taiwan was announced, the biggest opposition party, the right-wing Alianza Republicana Nacionalista (ARENA) declared that if they return to power after the 2019 elections, they will restore relations with Taiwan. This party has been associated with the Taiwanese lobby. However, it is difficult to know if they will keep this campaign promise, given the irregularity with which the US government is managing its diplomatic relations with El Salvador.

Can we expect more Central American countries breaking off with Taiwan?

Currently, Guatemala, Honduras, and Nicaragua are the Central American presidential countries that still maintain relations with Taipei. At least in the case of the Guatemalan and Honduran governments, there may be significant incentives for them to remain as allies of the ROC. In spite that it has been speculated that the Honduran government could be the next to recognize the PRC, as the Guatemalan government, Hondurans have proven to be closer to President Trump. For instance, last year Guatemala was the first country to follow the example of the United States and moved its embassy in Israel from Tel Aviv to Jerusalem. Both Guatemala and Honduras, in December 2017, were two of the eight countries to vote against a resolution of the United Nations General Assembly condemning that decision of the US government.

China will possibly continue with its policy of not intervening in the domestic politics of other countries, but it will probably keep investmenting in Central America. The United States, like Taiwan, could increase its aid to the countries that still recognize the ROC. Hence, a plausible scenario is that relations between those countries and the ROC continue.

Conclusions

Sovereign state recognition and, foreign policy in general, is a presidential power. However, for small countries, especially those within the influence zone of great world powers, it is a very relative power.

In this regard, the balance of forces between China and the United States has important repercussions on the domestic policies of the Central American countries. This phenomenon is more relevant due to the personality of the current US president, who has assumed a more aggressive foreign policy than his predecessors.

Trump has revived the Monroe Doctrine and it is possible that in the years to come, if re-elected in 2020, he could seek to increase the US presence in Central America to prevent the remaining nations that still hold diplomatic ties with Taipei to change them over Beijing. Nonetheless, given the pressing needs of Central American governments, unless the US and the ROC increase their aid to their Central American counterparts, the temptation to break off with Taiwan will continue.

 

 

Lithuania – President Grybauskaite in a continuous intra-institutional tug of war (Part 2)

 

The spring political season ended up on a low note for President Grybauskaite. Not only her relations with prime minister soured from the beginning of the year and continued to deteriorate into late spring, but she also became involved in an almost personal political warfare with Ramunas Karbauskis, leader of the ruling Lithuanian Framers and Green Union Party (LZVS), which presently holds the majority of seats in the parliament.

As the parliament was about to adjourn for the summer recess, Grybauskaite had “the last word” in closing the unusually tense political season. Carrying out a constitutionally mandated duty, she gave her pre-last State of the Nation address in the parliament (Grybauskaite’s second term will end next year in July, so her last annual address will be in June 2019).  There was a wide expectation among political analysts that her speech would mostly, if not exclusively, focus on the lingering political scandals and ongoing political corruption cases that turned into an open political warfare among various domestic political actors: major political parties, their leaders, coalition partners, the government, and, indirectly, even implicating the president herself. Although Grybauskaite devoted nearly half of her speech to “the party system crisis” and how the political infighting is “getting worse” as well as pointed out that the country was unable to rid itself of pervasive political corruption for the past 25 years, the president also issued a call for all “warring” parties to cooperate for the sake of Lithuania’s and its peoples’ wellbeing. [1]

Grybauskaite’s appeal for cooperation, however, will face three major challenges that are almost insurmountable given her political “baggage” and the mere ten months she has left until the end of her second, and final, term in office. Firstly, it is hard to imagine that regardless of her extended olive branch the squabbling political parties would suddenly accept Grybauskaite as a neutral mediator and conciliator. The reason for this is because president’s sympathies allegedly rest with the Fatherland Union (Conservatives)-Christian Democratic Party (TS-LKD), currently in opposition in the parliament. TS-LKD is seeking to fend off political corruption accusations voiced by Karbauskis and by his LZVS party’s members. In September, the LZVS has restarted the process of creating parliamentary commissions to investigate past political corruption cases that have already been undertaken by other government agencies. The launch of LZVS-initiated parliamentary commissions is also opposed, on constitutional grounds, by the president (to note, no parliamentary commission will be created or existing one tasked with probing into potential corruption cases in the agricultural sector, which is where Karbauskis made his financial fortune that allowed him and his party to achieve political success in the 2016 parliamentary elections).

Secondly, Grybauskaite’s track record of having tense and, at times, deeply conflictual relations with every government during her two terms—no matter whether it was led by the TS-LKD, social democrats, Labor, or the current farmers-green party coalition—does not add to the sincerity of her call or makes it credibile that she really aspires to pursue cooperation. Furthermore, her indirect hints in the 2018 national address of “a new corporate savior rising from the waters of disappointment” (allegedly referring to Karbauskis’ agricultural conglomerate and its potential “savior” role that it will propagate during three elections—municipal, presidential, and the EU parliament—that will be held in 2019); or in her description of the present LZVS-dominated parliament that “is turning into a shooting gallery for attacks against freedom and democracy, with random shots taken only to ban and penalize;” or in president’s description of the legislative branch productivity record, which “after a long period of vegetation” had suddenly overfilled its political agenda “[…] with very urgent issues, which are but trivial in the life of [Lithuanian] people,” while ignoring such major social problems as “social exclusion, emigration, Lithuania’s declining competitiveness, children’s literacy or preparations for referendum on dual citizenship.”[1] Such criticisms, although present in almost all of her previous presidential addresses, do not sound as peacemaking inclined nor do they suggest the burying of the intra-institutional war hatchet. On the contrary, the latest presidential address signaled Grybauskaite’sintentions to continue on a confrontational politics path.

Thirdly, cooperation suggested by Grybauskaite would be possible if parties were eager and willing to collaborate. However, neither Grybauskaite (as discussed above) nor Karbauskis have thus far shown any signs of willingness to resolve their political disagreements. It has to be noted that at the end of the legislative spring session Karbauskis claimed that he was fully determined to resume parliamentary investigations of political corruption cases, especially those involving TS-LKD party, as well as Grybauskaite’s “email-gate affair” as soon as the parliament resumes work in September. Furthermore, he announced that he would not set his foot into the presidential palace until a new president gets elected in 2019.[2]

It is, therefore, not surprising that when Grybauskaite tried to bring different warring parties—prime minister, the speaker of the parliament, and the leaders of two major political parties in parliament (namely, LZVS’Karbauskis and TS-LKD’G. Landsbergis)—together for an informal working dinner at the presidential palace in early September, Karbauskis refused to participate. He claimed that he had never received a formal invitation from the presidential office and even if he had, he would have declined to participate because he “did not find conversations in such a format useful.” “If the president has questions, and I also have questions, then [our] questions can be discussed in meetings with the Board of the parliament, at commissions’ meetings, and in other official formats that exist,” stated Karbauskis.[3] Grybauskaite cancelled the working dinner as it became clear that presidential efforts to smooth a tense political situation and lingering confrontations would bring no tangible results. Visibly, chances that these two political actors will be eager to cooperate appear rather slim.

Political analysts seem to agree that Karbauskis has two political strong suits over the president at this juncture in time. On the one hand, Grybauskaite has less than a year left in office and is primarily preoccupied with her political legacy and how it maybe impacted by the ongoing political squabbling, while Karbauskis certainly has a much longer political future (probably expecting that his party will be reelected in the 2020 parliamentary elections). On the other hand, building on political advantages he currently has, Karbauskis appears to have a desire to show off as to “who is who” (or “who is more important in Lithuania”) as he visibly enjoys the political limelight and a favorable political constellation. Apparently Karbauskis estimates that no matter the amount of criticism that Grybauskaite directly or indirectly voices about him, the LZVS, and his party’s political initiatives in the next ten months of her presidency and that whatever will be the intensity of such presidential criticisms that they will not have any profound political consequences either for him personally or for the LZVS.

Frustrating as it maybe for Grybauskaite however, she faces a precarious political situation at the moment. Indeed, other than public pronouncements in the media and issuance of staunch warnings for Karbauskis to not cross “certain red lines,” for the time being Grybauskaite is forced to concede. She has (informally) resigned from a peacemaker role, delegating it to the speaker of the parliament.[4] And yet, despite the futility of presidential efforts to move political parties and the parliament beyond political bickering, Grybauskaite appears to be determined to oppose Karbauskis and the LZVS’ initiatives to create new parliamentary commissions for as long as it takes. Her latest salvo came in a form of a staunch public warning to the current ruling majority as the president announced that she “would not be silenced” by Karbauskis or by anybody else.[5] It is becoming clear that political warfare and intra-institutional battles will continue into the foreseeable future, and, possibly, until Grybauskaite leaves office.

Notes:

[1] D. Grubauskaite “State of the Nation Address.” Available athttps://www.lrp.lt/en/speeches/state-of-the-nation-address/-2018/30194.

[2] “R. Karbauskis atrėžė D. Grybauskaitei: į prezidentūrą iki rinkimų kojos nekels.”Available at https://www.lrt.lt/naujienos/lietuvoje/2/213639/r-karbauskis-atreze-d-grybauskaitei-i-prezidentura-iki-rinkimu-kojos-nekels.

[3] “Jų susodinti prie bendro stalo nepavyko net Grybauskaitei: nekelia kojos ne tik į Prezidentūrą” Available at https://www.delfi.lt/news/daily/lithuania/ju-susodinti-prie-bendro-stalo-nepavyko-net-grybauskaitei-nekelia-kojos-ne-tik-i-prezidentura.d?id=78983123.

[4] “Prieš naująjį politinį sezoną Grybauskaitė perspėja: yra tam tikros raudonos linijos, kurių peržengti negali joks politikas.” Available at https://www.delfi.lt/news/daily/lithuania/pries-naujaji-politini-sezona-grybauskaite-perspeja-yra-tam-tikros-raudonos-linijos-kuriu-perzengti-negali-joks-politikas.d?id=78950091.

[5] “Grybauskaitės kirtis valdantiesiems: manęs nutildyti nepavyks.” Available at  https://www.delfi.lt/news/daily/lithuania/grybauskaites-kirtis-valdantiesiems-manes-nutildyti-nepavyks.d?id=79053675.

Moldova – Cohabitation as an inter-executive struggle with dashes of judicialization

By the end of September, the President of the Republic of Moldova was again the center of a political standoff that has been the bane of the country for quite some time. For the fourth time since October 2017, the constitutional court suspended the President (Igor Dodon from the PSRM, Party of Socialist of the Republic of Moldova) temporarily. Three of these four times were due to the refusal by the President to appoint ministers elected by parliament. This newly found instrument of temporarily getting rid of the president as a veto player has profound institutional and legal ramifications and questions the power of this directly-elected president. To address these issues, this post presents the constitutional court’s involvement as a case of “judicialization” (see e.g., Hirschl 2008) of core political questions. This form of judicialization is not necessarily comparable to judicialization under democracy, as it only emphasizes the involvement of the court in “key political issues” (Mazmanyan 2015, 200) and not a transfer of power from parliament to the court. The refusal of the President to appoint a cabinet member is, at its core, a decision of checks and balances and should not be influenced by the judiciary. In the following, I will describe the constitutional background and process of suspending the president with its most recent recurrence in September 2018 as well as the short and long-term implications arising from this power struggle.

The 1994 Moldovan constitution established a semi-presidential system, more specifically a premier-presidential system. The presidency enjoys an array of de jure power tools and also ceremonial responsibilities. Among the important instruments to discipline the fragmented parliamentary parties is the president’s right to dissolve parliament after two failed investiture attempts. Furthermore, and this is of importance here, the president appoints the cabinet after a parliamentary vote of confidence and also after a cabinet reshuffle upon the proposal of the prime minister (Art. 98) (see Fruhstorfer 2016). This provision is particularly important, as it was initially introduced as part of the 2000 constitutional amendment that formed a parliamentary system. Parts of this amendment (in particular the election of the president) were declared unconstitutional in 2016. The original 1994 constitution allowed the president much less involvement in the process by only being able to accept the oath of newly elected cabinet members. Thus, the 2000 amendment clarified and increased the power of the president, a provision that was not changed in the process of declaring parts of the 2000 amendment unconstitutional. There was no specific constitutional provision that stipulated how many times the president can refuse the appointment. Yet the January 2018 ruling of the Constitutional Court de facto amended the constitution. In their ruling on the second temporary suspension, the court specified that the president can only decline a proposal for a cabinet appointment once and must appoint a possible second candidate. Failing to do so is a violation of presidential duties (Constitutional Court 2018). Failing to fulfill these duties is then the justification for a temporary suspension. And indeed, the constitution envisions this occurrence, but the procedure of including the constitutional court is highly unusual, as it is the sole prerogative of parliament (Art. 89).

The way temporal suspension was and is used in Moldova comes close to the observation Mazmanyan (2015, 208) offers for the post-soviet area in general: “The record of judicial involvement in post-Soviet politics shows that higher courts get meaningfully activated only in situations witnessing a true political competition and uncertainty about the winner in the competition.” This form of judicialization is however a new trend in Moldova, the constitutional court was until recently the example of a non-politicized court among the countries in the post-soviet region. With the now fourth decision of temporally suspending the president – in case he does not follow suit – the court embraces a trend of incidental decision making (Mazmanyan 2015, 208) in competitive political situations. This intervention exposes the court to the danger of being exploited and manipulated by political forces and facing the challenging time when “judicial involvement in politics is more often than not a byproduct of political pressure or manipulation of constitutional law and of the constitutional judiciary” (Mazmanyan 2015, 200). It is unclear whether the often claimed “direct political instruction” of political forces (read Vlad Plahotniuc, chairman of the PDM, Democratic Party of Moldova) applies in Moldova. In any case, the decisions made by the constitutional court since March 2016 indicate a problematic politicization of the judiciary that decides on political issues and uses its rulings to overcome political competition. This was seriously criticized in the most recent report of the Bertelsmann Transformation Index (BTI 2018).

What seems like an “inter-institutional deadlock” (Popșoi 2017) in a period of cohabitation was long rumored to be only a sham to disguise how Vlad Plahotniuc and President Igor Dodon have consolidated their power with the help of each other. Yet, the political standoff between the government and the constitutional court on one side and the president – at least superficially – on the other side, seems to be a mundane power struggle. Yet, mundane does not make it any less dangerous. The court’s involvement in this power struggle and the following judicialization of key issues of the competition inherent to a premier-presidential system are seriously damaging the political institutions and does not bode well for the future democratic development.

Literature

BTI (2018): Country Report Moldova, in: https://www.bti-project.org/fileadmin/files/BTI/Downloads/Reports/2018/pdf/BTI_2018_Moldova.pdf [last accessed October 8, 2018]

Constitutional Court (2018): Press Release. The President of Moldova may only once decline PM’s proposal of Cabinet reshuffle, in: http://constcourt.md/libview.php?l=en&idc=7&id=938&t=/Media/Noutati/The-President-of-Moldova-may-only-once-decline-PMs-proposal-of-Cabinet-reshuffle/ [last accessed October 8, 2018]

Fruhstorfer, Anna. (2016). Moldova. In Constitutional Politics in Central and Eastern Europe (pp. 359-387). Springer VS, Wiesbaden.

Hirschl, Ran. (2008). The judicialization of mega-politics and the rise of political courts. Annu. Rev. Polit. Sci., 11, 93-118.

Mazmanyan, Armen. (2015). Judicialization of politics: The post-Soviet way. International Journal of Constitutional Law, 13(1), 200-218.

Popșoi, Mihai. (2017). Moldovan President Igor Dodon Suspended by the Constitutional Court. https://moldovanpolitics.com/2017/10/25/moldovan-president-igor-dodon-suspended-by-the-constitutional-court/ [last accessed January 15, 2018]

South Korea – The President and the Economy

Several presidents in South Korea have entered office with pledges to address the economy: former President Lee Myung-bak’s 747 economic plan; former President Park Geun-hye’s economic democratization; and current President Moon Jae-in’s “J-nomics.” The focus on the economy may seem surprising, given that the Korean economy is hardly considered a laggard by on most counts: in 2017, the per capita GDP was US $38,350, real GDP growth 3.1 percent, and unemployment at 3.7 percent. As a comparison, the OECD average per capita GDP in 2017 was US$ 42,252, GDP growth was 2.6, and unemployment was 5.77. This may sound like First World problems to many, but the economic weaknesses behind the stellar numbers is very real and may be a contributing factor to the country’s high suicide rates among youths and the aged. This piece discusses some of these weaknesses.

President Moon’s “J-nomics” relies on the principle of income-led growth based on job-creation and consumption as the drivers of economic growth in the country, with the public sector spearheading this new approach. The approach was embraced for its radical departure from the trickle-down blueprint of his predecessors that relied on corporate-growth to engender jobs and lead to higher incomes. The President’s bold reorientation of the economy took a major step forward with the implementation of a 16 percent wage rise to 7,530 won ($6.60) per hour from 2018 by the Minimum Wage Commission; this was followed by a reduction in the workweek to 52 hours in July 2018. To ensure that small and medium-sized enterprises are able to meet the new wage increases, the government rolled out huge subsidies for small- and medium-sized businesses as well as the self-employed that were hardest hit by the new minimum wage policy.

What are some of the economic weaknesses that this new approach is designed to address? One of the biggest problems for the Korean economy is labor market dualism. Korea has one of the highest incidence of low-paid work among the OECD countries, exceeding 20 percent, stemming from the high number of non-permanent workers in the economy, as depicted in Figure 1.

Figure 1: Total employment in Korea by status in employment, 2016 (number of persons and share of total, %) 

The large firms – particularly the chaebols that hire more than 300 workers – pay significantly better, as Figure 2 below shows. However, they have also significantly reduced their share of the labor market, generally contracting out work to the small- and medium-sized companies or outsourcing abroad, as shown in Figure 3.

Figure 2: Average hourly base pay in Korea

Figure 3: Share of labor market by firm-size

This reduction is higher than has occurred in other OECD countries, as Figure 4 shows, which is partly instructive of how poorly previous policies relying on trickle-down job creation has worked.

Figure 4: Persons employed by firm size, 2013 or latest available year (%)

At the same time, however, the numbers above also explain why President Moon’s policies have run into problems: small- and medium enterprises are the dominant employers in the Korean economy, and they have been unable to absorb the minimum wage increases, even with the help of the government’s subsidies. Meanwhile, the 26 percent non-regular workers are not beneficiaries of the minimum wage.

As a result, despite the President’s efforts, 2018 has been a challenge: unemployment rate rose from 3.8 percent in July 2018 to 4.2 percent in August; this is the highest level for the year, and the highest in the aftermath of the global financial crisis. The President’s popularity has fallen hard on the economic news, and there are signs that the increasing economic distress in the country is leading to open conflict in the President’s cabinet over the efficacy of the policy.

The President has, thus far, maintained commitment to the direction of the policy, but has also signaled a willingness to temper its magnitude. Meanwhile, there have been suggestions that a more successful approach would be to address the issue from a social protection standpoint. With social protection at 10.4 percent of the GDP, Korea is among the lowest of OECD countries where the average is 21 percent of the GDP. There is clearly room for steering the economy, particularly for those most vulnerable to economic shocks, in that arena.

Nicaragua – How Daniel Ortega Became an Extremely Strong President

To end a five-and-a-half-month protest movement against him, on 29 September 2018 Nicaraguan president Daniel Ortega decreed protest demonstrations illegal. The protests had been met with vigorous repression by riot police and ‘paramilitaries’, off-duty police and party tough guys—called la turba/the mob—equipped with assault rifles. The government acknowledges that 192 people have died; La Prensa, the opposition daily, counts 450; while cautious commentators note at least 350 fatalities. In all cases the casualties were overwhelmingly protesters. Further, over 20,000 Nicaraguans are reported to have fled to Costa Rica. Efforts by the Catholic Church to mount a National Dialogue to bring the two sides together failed as the protesters demanded that Ortega resign and new elections be held within a year. The president refused.

It’s easy to explain why the protests began. President Ortega issued a decree on 18 April raising social security contributions while reducing the amount paid to pensioners. He did so for a good reason—a growing budget deficit. However, he acted without consulting the pensioners. This brought a loud and large demonstration led by pensioners, supported by university students not aligned with the president’s party, the FSLN (Sandinista National Liberation Front). That Daniel, as he is universally known in Nicaragua, rescinded the decree the day after the protest suggests he recognised his error. Yet he did not modify his response to the protesters. Indeed, as time passed greater force has been used, protesters were charged with terrorism and doctors treating protesters were fired from their hospitals. To understand why, we need to examine Ortega’s political CV.

In 1963, 18-year old Daniel Ortega joined the FSLN (Sandinista National Liberation Front) to fight the then 26-year old Somoza family dictatorship. Four years later Ortega was imprisoned for bank robbery—fund-raising for the revolution. He served six years, then returned to revolutionary activities. By1979 the Somozas were deposed and Daniel was one of nine Commanders of the Revolution, hence part of the FSLN’s National Directorate: revolutionary Nicaragua’s policy-making executive. He was also the co-ordinator of the Governing Council for National Reconstruction (JGRN), a five-person, appointed, formal executive representing the various groups who opposed the Somozas.

In 1984 Ortega won the presidency in free elections. The1987 constitution gave him extensive powers, which he enjoyed until 1990 when he lost to Violeta Chamorro of the UNO (National Union of the Opposition). He would lose twice more—in 1996 to Liberal Arnoldo Alemán, and in 2001 to the Liberal-backed Conservative Enrique Bolaños. Ortega, though, used those 16 years to consolidate his control over the FSLN and begin the process of installing Sandinista judges in the judiciary. Ortega also saw the constitution amended to impose a presidential term limit (no immediate re-election and a two-term lifetime limit) in 1995. However, he struck a deal with President Alemán in 2000 to enact amendments that began rolling back constraints on the president, a process that concluded with the constitutional amendments of 2014 that eliminated all limits on presidential re-election.

Critically, during those years, Ortega also changed his politics. The one-time revolutionary leftist now supports Nicaraguan capitalists, a class that now includes him and his family. He and his wife Rosario Murillo, currently his vice-president, also mended fences with the Catholic Church, a determined foe of the FSLN in the 1980s and 1990s, when Cardinal Miguel Obando y Bravo married them in a church ceremony in 2005. More telling, though, was the FSLN’s support for the criminalisation of abortion shortly before the 2006 elections.

Despite taking just 38 percent of the vote in 2006, Daniel regained the presidency, as two Liberals split 55 percent of the vote nearly equally between them. Since his inauguration in 2007, Ortega has solidified his support by enacting redistributive policies, something not seriously undertaken since 1990. Unfortunately, he has also turned to electoral manipulation to assure his success. There is evidence indicating that electoral manipulation quickly became commonplace– aided greatly by the FSLN’s control of Nicaragua’s Electoral Council. However, it was the 2008 mayoral vote in Managua, Nicaragua’s capital, that provoked the strongest protest and brought a violent response from the government, though no deaths were reported.
Assuring electoral victory was only the first step Ortega took. The term limit provisions of the 1995 constitution meant that Daniel would have to leave the presidency in 2011. He could not amend the constitution, as that required the votes of 56 National Assembly deputies, and the FSLN had only 38. He could, however, use his control of the judiciary to produce a work-around. In 2009, the Constitutional Division of the Supreme Court ruled that Ortega’s right to political participation was illegally circumscribed by the constitution’s no immediate re-election clause and declared that it did not apply to him or to similarly affected Sandinista mayors; but no one else. And when protests arose in 2013-2014 over a now abandoned canal project, the Sandinista government responded with harassment and intimidation, but not the violence we see in 2018.

The final step in Ortega’s amassing power in his own hands came in 2014 via amendments to the Military Code and National Police Law that shifted administrative control over both the military and police to the president. Of course, 2014 also saw all limits on presidential re-election removed. Thus in 2018, Daniel Ortega has acquired an effective monopoly over state power. He is a personal ruler and an uncommonly powerful president. Observers of Nicaraguan politics, both supporters and critics of Daniel, believe that Rosario Murillo will succeed him and that their son, Laureano, will succeed her. This was the Somozas’ model from 1936 to 1979 and it bodes ill for Nicaraguan democracy. Similarly, the violence his government currently employs against protesters also echoes the Somoza era. Ortega has been able to make state institutions work for him. In doing so, he has adopted the methods of the very Somoza dictatorship he and the FSLN overthrew in 1979.