Aug 23rd 2018

Tough Times for the Tough Guys

by Chris Patten

Chris Patten is a former EU Commissioner for External Relations, Chairman of the British Conservative Party, and was the last British Governor of Hong Kong. He is currently Chancellor of Oxford University and a member of the British House of Lords.

 

TARN, FRANCE – Shares in strongman leaders seem to be falling. The market has not yet turned bearish, but autocrats have little reason to feel bullish.

Consider China. The internal power games of the Communist Party of China (CPC) are notoriously opaque, and rarely does political infighting reach the level at which it cannot be covered up. And yet rumbles of disquiet can clearly be heard. This month, as President Xi Jinping and his senior advisers retreated to the seaside resort of Beidaihe, rumors were circulating about growing criticism of Xi’s personality cult among the CPC rank and file.

Judging by the rumors, Xi should be asking himself if it was wise to roll back Deng Xiaoping’s reforms, and to ignore the precedents set by former CPC leaders such as Jiang Zemin and Hu Jintao. He might also want to reconsider his triumphalist rhetoric, given US President Donald Trump’s nationalist sensitivities and protectionist bullying. Lastly, he may want to reassess his signature policy, the Belt and Road Initiative, which is increasingly being criticized as a mechanism for China to export its debt to other indebted countries, often through investments in white elephants and other dubious projects.

Meanwhile, Xi’s new best friend, Russian President Vladimir Putin, remains politically impregnable. But, as one Fox News reporter suggested, that might be because so many of his critics “end up dead.” Russia’s government still depends on oil and gas for 40% of its revenue, and the economy, deprived of both entrepreneurial dynamism and foreign investment, remainsmoribund. Look around your home and see if you can find anything that came from Russia, aside from vodka, energy, or the works of Tolstoy.

But Putin and Xi’s strongman troubles pale in comparison to those of Turkish President Recep Tayyip Erdoğan and Trump, who has now been implicated by his longtime lawyer and “fixer” in the commission of a federal felony.

Fifteen years after coming to power on the back of a foreign-exchange crisis, Erdoğan now seems intent on manufacturing a new crisis of his own. The Turkish lira has lost 38% of its value against the dollar this year, owing almost entirely to Erdoğan’s economic illiteracy, cronyism, and deafness to alternative viewpoints.

Unlike his predecessor as president, Abdullah Gül, Erdoğan has never made much of an effort to be a leader for the whole country. His overbearing manner and self-serving policies have deepened the divisions between affluent secularists and the poorer, rural Muslims who form his base.

Turkey’s latest crisis is all the more tragic for being unnecessary. The country is an important regional hub, home to 81 million people, and a bridge between the West, the Middle East, and Central Asia. It has the potential to be an economic dynamo. But Erdoğan’s policies are dragging Turkey’s economy into a hole.

Though the lira is in freefall and inflation is soaring, Erdoğan has pressured the central bank not to raise interest rates, for fear that a growth slowdown will hurt his party’s prospects in next year’s local elections, especially in Turkey’s cities. But over the next 12 months, he will have to deal with a widening current-account deficit and a mountain of dollar-denominated debt.

Making matters worse, Erdoğan recently appointed his unqualified son-in-law, Berat Albayrak – the Jared Kushner of Ankara – as Minister of Finance and Treasury, further unsettling the markets. And he has engaged in an escalating diplomatic and trade dispute with the US over the arrest of an American pastor accused of complicity in the 2016 coup attempt against Erdoğan. Trump, for his part, has made freeing the pastor a personal crusade, most likely as a sop to his evangelical base in the run-up to the US midterm elections this November. To that end, he recently announced that he will double US levies on Turkish aluminum and steel.

Trump’s desperation to prove that he cannot be pushed around by anyone (except Putin) is well known. In the dispute with Turkey, he did not hesitate to throw tariffs around like confetti, regardless of the potential blowback on US businesses and consumers. Never mind that Turkey is an important NATO ally. Trump seems intent on pushing it out of the alliance and into the arms of Russia and China.

Despite his mounting legal problems and increasingly dubious legitimacy, Trump has continued to wreck the post-war international order that America helped to create. Worse still, his brand of selfish nativism is spreading through Asia and Europe, upending politics in Italy, Hungary, Poland, and even the United Kingdom.

In Britain, the new foreign secretary, Jeremy Hunt, has argued that the movement behind the Brexit campaign is different from the populist nationalism in other countries. It isn’t. Beleaguered Brexit hardliners are clearly animated by hostility toward immigrants and foreigners. If Hunt has any doubt about that, he need look no further than his predecessor, Boris Johnson, who recently wrote a commentary mocking Muslim women who wear burqas.

Unlike today’s aspiring strongmen, a truly tough leader would stand up for international cooperation, and seek to persuade voters why it matters. One hopes that French President Emmanuel Macron, German Chancellor Angela Merkel, and Japanese Prime Minister Shinzo Abe will do precisely that in the coming months.

In the meantime, we must pray that wannabe tough guys like Trump and Erdoğan do not do too much damage to their respective countries, and to the rest of us. It is time to make cooperation great again.


Chris Patten, the last British governor of Hong Kong and a former EU commissioner for external affairs, is Chancellor of the University of Oxford. 

Copyright: Project Syndicate, 2018.
www.project-syndicate.org

 


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