Tag Archives: Economic Reform

Gabon – President Bongo on the road to 2016, between continuity and change

Gabon does not often make the headlines. Yet the country has changed in many ways since President Ali Bongo Ondimba took power after his father Omar Bongo Ondimba passed away in 2009, having served nearly 42 years in office. At the time of his death, Omar Bongo was the longest-serving ruler in the world, outside of royalty. A few months after his father’s passing, Ali Bongo was elected in a contested presidential poll which he won with 42% of the votes (Gabon does not have a presidential run-off), well under his father’s score of 79% in 2005. Ali Bongo (ABO) faced off against several contenders from within the ruling Gabonese Democratic Party (PDG) who resigned from the party and ran as independents after the PDG designated ABO as the party candidate.  His below 50% score in the poll, despite irregularities and allegations of vote rigging, was symptomatic of the challenges ABO faced and continues to face in imposing himself as the heir to his father’s rule.

Since taking power, Ali Bongo has sought to distance himself from the patronage system of his father and to recast himself as a business-oriented, globalized, modern president. The presidency’s webpage has up-to-date information, including a candid discussion of the Mo Ibrahim Index’s most recent assessment of Gabon; the website also features links to ABO’s facebook page and to a form for sending messages to the president. In January 2014, Ali Bongo initiated an anti-corruption campaign – operation ‘main propres’ (clean hands) – which includes an audit of state expenditures during his father’s rule. The first head to roll was that of the Secretary General of the Ministry of Mines, Industry and Tourism, Jeannot Kalima. Kalima, a long-time PDG-member, was arrested in August, accused of misappropriating funds earmarked for public infrastructure projects during his time as chief of cabinet for the Minister of Public Works, in the 2000s. In recognition of his reform efforts and support for US foreign policy in the UN, Ali Bongo was invited to a private meeting with President Obama, in 2011.

By some accounts, however, rather than a change in governance practice there has been a renewal of the political elite, with a younger crowd now seated at the table, feasting on public funds. In fact, Gabon’s score on Transparency International’s Corruption Perceptions Index (CPI) declined by one point, from 35 to 34, between 2012 and 2013. This was still an improvement over the 29 point score in 2009, the year Omar Bongo died [the CPI scores countries on a scale from 0 (highly corrupt) to 100 (very clean)].

Opposition leaders complain the anti-corruption drive is politically motivated, and aimed at eliminating potential competitors for the 2016 presidential poll.  Lending some credibility to the claim that the government does not exactly embrace an active opposition, Freedom House scores indicate that Gabon has regressed from a Partly Free to a Not Free status under ABO, due to government crack-down on private media and opposition demonstrations. One of ABO’s leading opponents is Jean Ping, former chair of the African Union, who earlier this year declared his allegiance to the opposition – where the other leading figures, like Ping himself, are largely ex-PDG stalwarts and regime insiders who have parted ways with the Bongo family since Ali’s rise to the presidency.

Two years out, the 2016 presidential campaign in Gabon is already heating up (presidential mandates are 7 years, with no term limits). Ping has created an alliance with a number of other leaders, the United Opposition Front for Alternation (FOPA). Should FOPA succeed in uniting the opposition behind a single candidate for the next presidential poll, it could pose a formidable challenge for ABO. Ali Bongo’s ambitious investment programs and push for a diversification of the economy away from oil are yet to bear sufficient fruits for the average Gabonese to see a change in his or her living conditions, despite an expected economic growth of 7.8% this year. Should the voters go for “alternation” (and the electoral commission act truly independently), ABO could see his prediction that “I won’t be there as long as my father” come true earlier than he expected.

The Weakness of Opposition Parties in Latin American Presidential Systems

This week, Argentine Vice-President, Amado Boudou, became the first sitting Latin American vice-president to be formally charged with corruption. Vice-President Boudou, during the period when he was Minister of the Economy (2009-2011), is accused of helping to illegally halt bankruptcy proceedings by Argentina’s tax bureau against the company Ciccone. This event has occurred in the same week that the Argentine government stated that the next bond payment is all but ‘impossible,’ while the monthly inflation rate runs into double figures.

In Venezuela, the embattled president, Nicolás Maduro, is facing frequent street demonstrations, which have witnessed a sizable number of fatalities, food and energy shortages and rapidly rising prices.

In both countries however, what is puzzling is not necessarily that support for both governing parties remains relatively high, but that opposition parties remain so weak and disorganized. This is particularly puzzling given that the general context in both countries should be particularly auspicious for the opposition. What explains the persistent weakness of opposition parties in some Latin American presidential democracies?

Part of the answer probably lies in the nature of the presidential regime itself. In highly fluid party systems, which lack party organization and structure, opposition party members often drift to the president in search of the budgetary goodies Latin American executives frequently have at their disposal. Néstor Kirchner and the defection of Unión Cívica Radical (UCR) governors and legislators is a case in point (of course, the budgetary prerogatives at the disposal of the executive are also probably endogenous to the weakness of the party system). Part of the answer can also most likely be found in the explanations for competitive authoritarianism.

But I think we need to go back a little further to the period of economic reform in the late 1980s and early 1990s to understand the persistent weakness of opposition parties. Kenneth Roberts, Noam Lupu, Jason Seawright and Jana Morgan have all produced excellent work recently that has explored the collapse of Latin American party systems. We can draw some insights from this work. During the period of economic reform, where traditional left-leaning or populist parties were responsible for economic reform, this has led to the collapse, or at least partial collapse, of the party system (what Kenneth Roberts has called a de-aligning critical juncture). In these instances, this has sounded the electoral death knell of both the traditional right (as the left assumed their policy space), and the traditional left, who became outflanked by populist or radical outsiders that railed against market reform.

These outsiders become the new insiders (in Argentina, it was one faction within the Peronists; in Venezuela it was the Chavistas). The opposition ends up as a mismatch of various parties, many of which have suffered resounding electoral defeats (e.g. COPEI and AD in Venezuela). These parties are organizationally weak and have lost their traditional electoral bases and party machines. In many instances, they are forced to adopt positions that predominantly amount to ‘anti-politics’ as opposed to coherent programmatic policies.

However, this picture is still very rough. What we need is a more systematic investigation of the weakness of opposition parties in Latin American presidential systems.

 

Venezuela – Nicolás Maduro Begins the New Year with a Cabinet Reshuffle

For many, the New Year represents an opportunity for change. For Nicolás Maduro, the somewhat embattled President of Venezuela, the beginning of 2014 has ushered in a cabinet reshuffle and a reorganization of the nation’s economic management.

On Wednesday January 15th, Maduro, in his first state of the union speech, addressed the national assembly and presented his annual government report. As part of this speech, Maduro laid out his major initiatives for the year. All in all, these initiatives signaled quite a degree of organizational change in both his government and strategy of economic governance.

To begin, he announced the reorganization of his cabinet. José Khan will become the Minister of Commerce, while the Public Banking Ministry and the Ministry of Finance will be merged. Rodolfo Marco Torres, the current Minister of Public Banking, will assume this new expanded portfolio and replace Nelson Merentes as Finance minister. Although Merentes will now be the head of the Central Bank, many see the appointment of Torres, an army general who was part of Hugo Chávez’s attempted coup of 1992, as a clear indication that Maduro is set upon deepening the socialist revolution begun by his predecessor, given Torres is deemed something of an ideologue in comparison to the more pragmatic Merentes.

As part of the realignment of his economic team, Maduro also announced a series of economic reforms aimed at addressing some of the more serious underlying flaws in the Venezuelan economy. These reforms include a strengthening of government control over the national currency, the bolívar. The Foreign Exchange Administration Commission (Cadivi) is to be disbanded and its responsibilities assumed by the National Foreign Trade Corporation (which will now be run by Alejandro Fleming), while the official exchange rate has been set at 6.3 bolívars to 1 US dollar, for the entirety of 2014. Although this was not the currency devaluation expected by economists, given the widening fiscal deficit, the Financial Times has suggested it represents “devaluation by stealth,” as the foreign exchange auction system (Sicad), where the Central Bank sells US dollars, is to be significantly expanded.

Finally, both to further bolster the government’s reforms, and to combat an inflation rate hovering around 54 per cent, Maduro announced the establishment of a 30 per cent ceiling on profits for all businesses, which will be part of the new Law on Costs and Fair Prices.

However, it isn’t all change in Maduro’s Venezuela. Rafael Ramírez will remain as vice-president of the government’s economic cabinet, energy minister and president of the state-run oil company, PDVSA.