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

 


This article is brought to you by Project Syndicate that is a not for profit organization.

Project Syndicate brings original, engaging, and thought-provoking commentaries by esteemed leaders and thinkers from around the world to readers everywhere. By offering incisive perspectives on our changing world from those who are shaping its economics, politics, science, and culture, Project Syndicate has created an unrivalled venue for informed public debate. Please see: www.project-syndicate.org.

Should you want to support Project Syndicate you can do it by using the PayPal icon below. Your donation is paid to Project Syndicate in full after PayPal has deducted its transaction fee. Facts & Arts neither receives information about your donation nor a commission.

 

 

Browse articles by author

More Current Affairs

Sep 29th 2022
EXTRACTS "Ever since she became a prominent political figure 12 years ago, Truss has been a shapeshifter. She started as a Liberal Democrat before becoming a Conservative, and she voted to remain in the European Union before championing Brexit. As a minister, it is hard to think of anything she accomplished. She signed a few EU trade deals as Secretary of State for International Trade, but most of those were rollovers." --- "But if until recently it seemed that Truss was driven solely by political ambition, her government’s 'mini-budget' proposal sheds light on her deeper ideological affinities."
Sep 20th 2022
EXTRACT: "Russia’s focus on Ukraine and Putin’s choice to frame this as a civilisational struggle with the west has created opportunities for China to enhance its influence elsewhere – at Russia’s expense."
Sep 20th 2022
EXTRACTS: ”The Ukrainian army is making spectacular advances,” --- “…the European Union has fully mobilized to confront the energy crisis.” ---- “we are helping our partners in the Global South to handle the fallout from Russia’s brutal aggression and cynical weaponization of energy and food.” ---- “In short: the overall strategy is working. We must continue to support Ukraine, pressure Russia with sanctions, and help our global partners in a spirit of solidarity.”
Sep 8th 2022
EXTRACT: "In 1950, a team of sociologists, including the philosopher Theodor Adorno, conducted an empirical study, later published as The Authoritarian Personality, which ....... “If a potentially fascistic individual exists, what, precisely, is he like? What goes to make up antidemocratic thought? What are the organizing forces within the person?... what have been the determinants and what is the course of his development?”
Aug 29th 2022
EXTRACT: "Russian aggression certainly poses a threat; but it is a familiar one that we know how to deal with. Rising temperatures, dry riverbeds, parched landscapes, falling crop yields, acute energy shortages, and disruptions to industrial production are something else."
Aug 25th 2022
EXTRACTS: "As the revolutionary founder of a new Chinese state, Mao emphasized ideology over development. For Deng and his successors, it was the opposite: De-emphasis of ideology was viewed as necessary to boost economic growth through market-based 'reform and opening up.' Then came Xi. Initially, there was hope that his so-called 'Third Plenum Reforms' of 2013 would usher in a new era of strong economic performance. But the new ideological campaigns carried out under the general rubric of Xi Jinping Thought, including a regulatory clampdown on once-dynamic Internet platform companies and associated restrictions on online gaming, music, and private tutoring, as well as a zero-COVID policy that has led to never-ending lockdowns, have all but dashed those hopes." ----- "With the upcoming 20th Party Congress likely to usher in an unprecedented third five-year term for Xi, there is good reason to believe that China’s growth sacrifice has only just begun."
Aug 23rd 2022
EXTRACTS: "Less widely noted, however, is that the prices of many commodities fell this summer. The price of oil decreased by about 30% between early June and mid-August. The politically sensitive price of gasoline in the United States fell by 20% over the same period, from $5 per gallon to $4 per gallon. The overall index fell 12%." ---- "There are two macroeconomic reasons to think that commodity prices in general will fall further. The level of economic activity is a self-evidently important determinant of demand for commodities and therefore of their prices. Less obviously, the real interest rate is another key factor. And the current outlook for both global growth and real interest rates suggests a downward path for commodity prices."
Aug 22nd 2022
EXTRACT: "How Trump planned to use the classified documents remains a question that investigators presumably have made a high priority. Depending on the answer and the resulting charges, if any, one thing is certain: Trump will play hardball, including by amplifying his claims of victimhood at the hands of the fictional Deep State, and denying any wrongdoing in purloining the documents. His lies and hyperbole, however, don’t preclude seeking a plea deal. In his previous tangles with the law, such as his Trump University scam, he agreed to compensate the victims (in that case $25 million) after his prevarications were exhausted."
Aug 21st 2022
"On one side, there is the foreign secretary, Liz Truss, for whom all but the most partisan Tory would struggle to count many successes during her lengthy cabinet career." ---- "Rishi Sunak, whose proposed policies appear more attuned to the imperative of tackling inflation and the hardship it is causing. But on the big issues of the past few years, Sunak has been wrong. He backed Brexit from the beginning, denies the damage it is doing, and enthusiastically supported Johnson’s bid for the premiership." ---- " Which of these two can offer honesty to the British people, who deserve to be treated like grown-ups? To paraphrase the US Democratic politician Adlai Stevenson, the average man and woman are better than average."
Aug 10th 2022
EXTRACT: "Central banks are thus locked in a “debt trap”: any attempt to normalize monetary policy will cause debt-servicing burdens to spike, leading to massive insolvencies, cascading financial crises, and fallout in the real economy. ---- With governments unable to reduce high debts and deficits by spending less or raising revenues, those that can borrow in their own currency will increasingly resort to the “inflation tax”: relying on unexpected price growth to wipe out long-term nominal liabilities at fixed rates."
Jul 29th 2022
EXTRACT: ".... the likelihood is that Biden, who spent his life as a senator, played a central behind-the-scenes role in turning Manchin around and keeping the Democratic Party Senators together on this pared-down version of Build Back Better. Biden’s legislative accomplishments, not to mention his administrative ones, will likely end up being very impressive for the first two years of his presidency. ------ In matters of climate, every ton of CO2 you don’t put into the atmosphere is a decrease in how hard life will be for our grandchildren. They will have reason to be grateful to President Biden and the Democratic Party if this bill becomes law."
Jul 29th 2022
EXTRACTS: "Right-wing media outlets including Fox News, One America News (OAN), Newsmax, and talk radio are grossly abusing the right to free speech and are causing profound, if not irreparable damage to our country at home and abroad. They have been engaged in these deliberate practices of spreading poisonous misinformation all in the name of free speech." ---- "A team at MIT, analyzing propaganda techniques in the news, underscores the use of logical fallacies – such as strawmen (the misrepresentation of the other’s position), red herrings (the provision of irrelevancies), false dichotomies (offering two alternatives as the only possibilities), and whataboutism (a diversionary tactic to avoid directly addressing an issue). ---- Whataboutism is worth considering more closely because it is becoming ubiquitous among Republicans – perhaps this is not surprising given that it is certainly Trump’s “favorite dodge.” It is one of the fundamental rules by which he operates: when you are criticized, say that someone else is worse. In an interview with Trump, Bill O’Reilly states the obvious fact that “Putin is a killer,” and who can forget Trump’s response: “There are a lot of killers. You got a lot of killers. What, you think our country is so innocent?” That is classic whataboutism. And it is also of course all over Fox News’ most popular line-up."
Jul 24th 2022
EXTRACTS: "For three hours, against the unequivocal advice of his counsel, friends, and family, Trump purposefully and steadfastly declined to give the mob he had summoned any signal to disperse, to exit the building peacefully, or to simply cease threatening the life of his vice president or other members of Congress." ------ "Trump is corrupt to the core, a traitor who deserves nothing but contempt and to spend the rest of his life behind bars because he remains a menace to this country and an existential threat to our democratic institutions."
Jul 21st 2022
EXTRACT: "For some countries, diasporas also are not new. Just ask the Russians. For three-quarters of a century, Stalin’s NKVD and its successor, the KGB, kept close tabs on expatriate Russians, constantly worrying about the threat they might pose. And now, Russian President Vladimir Putin’s security service, the FSB, is continuing the tradition. According to recent FSB estimates, almost four million Russians left the country in the first three months of this year. Obviously, FSB statistics are hard to verify. But the sheer magnitude of this year’s departures is striking."
Jul 20th 2022
EXTRACTS: "We need leaders who will be honest about our problems in the short, medium, and long term. We are becoming poorer than our neighbors, with our per capita growth and productivity lagging behind theirs. We confront surging energy prices, soaring inflation, and public-sector strikes. Our fiscal deficit is uncomfortably high. Our influence is diminished. Far from recognizing these challenges, let alone proposing sensible solutions, the candidates to succeed Johnson are trying to win votes with reckless proposals like ever-larger tax cuts." ----- "There is one exception. Former Chancellor of the Exchequer Rishi Sunak refuses to abandon the notion that expenditure should bear some relationship to revenue. "
Jul 13th 2022
EXTRACT: "Looking ahead, five factors could make today’s energy crisis even worse. First, Putin has opened a second front in the conflict by cutting back on the contracted volumes of natural gas that Russia supplies to Europe. The goal is to prevent Europeans from storing enough supplies for next winter, and to drive prices higher, creating economic hardship and political discord. In his speech in June at the St. Petersburg International Economic Forum, Putin made his reasoning clear: “Social and economic problems worsening in Europe” will “split their societies” and “inevitably lead to populism … and a change of the elites in the short term.” ...... As it is, Germany is now anticipating the need for gas rationing, and its minister for economic affairs, Robert Habeck, warns of a “Lehman-style contagion” (referring to the 2008 financial crisis) if Europe cannot manage today’s energy-induced economic disruptions."
Jul 5th 2022
EXTRACT: "Fortunately, I am not alone in claiming that the survival of democracy in the US is gravely endangered. The American public has been aroused by the decision overturning Roe. But people need to recognize that decision for what it is: part of a carefully laid plan to turn the US into a repressive regime. We must do everything we can to prevent that. This fight ought to include many people who voted for Trump in the past."
Jul 2nd 2022
EXTRACT: "The Israeli philosopher Avishai Margalit described this succinctly in his book On Compromise and Rotten Compromises. In “politics as economics,” material interests are “subject to bargaining, everything is negotiable, whereas in the religious picture, centered on the idea of the holy, the holy is non-negotiable.” This, then, is why politics in the US is now in such a perilous state. More and more, the secular left and the religious right are engaged in a culture war, revolving around sexuality, gender, and race, where politics is no longer negotiable. When that happens, institutions start breaking down, and the stage is set for charismatic demagogues and the politics of violence."
Jul 2nd 2022
EXTRACT: "...EU enlargement is essentially a political decision by member states, based on a multitude of considerations that sometimes include dramatic events. Russia’s war of aggression against Ukraine is such a turning point."
Jun 29th 2022
EXTRACT: "Most market analysts seem to think that central banks will remain hawkish, but I am not so sure. I have argued that they will eventually wimp out and accept higher inflation – followed by stagflation – once a hard landing becomes imminent, because they will be worried about the damage of a recession and a debt trap, owing to an excessive build-up of private and public liabilities after years of low interest rates." ----- "There is ample reason to believe that the next recession will be marked by a severe stagflationary debt crisis. As a share of global GDP, private and public debt levels are much higher today than in the past, having risen from 200% in 1999 to 350% today (with a particularly sharp increase since the start of the pandemic). Under these conditions, rapid normalization of monetary policy and rising interest rates will drive highly leveraged zombie households, companies, financial institutions, and governments into bankruptcy and default."