// archives

US

This tag is associated with 345 posts

Zimbabwe: Broke Again

“Zimbabwe is open for business” was President Emmerson Mnangagwa’s slogan in the July election that was supposed to show that the long and destructive reign of dictator Robert Mugabe, overthrown late last year, is really now a thing of the past. The country has been getting steadily poorer for decades now, but this election would be the turning point.

“You can rig an election – as they did on 30th July 2018 – but you can’t rig an economy, you can’t rig a supermarket or a gas station,” replied Tendai Biti, a leading member of the opposition Movement for Democratic Change (MDC), and it turns out that he was right. Less than three months after the election, Zimbabwe is in a huge economic crisis.

People are getting desperate, because shops are running out of essential items like bread. Even beer is being rationed (two bottles per person), and the cost of everything is soaring as people once again lose confidence in the currency. KFC and other fast-food chains have closed their doors because inflation is moving too fast to calculate.

Zimbabweans are comparing it to the great inflation of 2008, when the Zimbabwean dollar became less valuable than the paper it was printed on – bags full of 100-trillion-dollar notes were not enough to buy bread – and peoples’ pitifully small savings were wiped out.

After that the Zimbabwean currency was entirely abandoned and the country began using American dollars and South African rands instead. Gradually, however, the government began reintroducing a kind of local currency as well, pegged one-for-one to the US dollar, officially called ‘bond notes’ but popularly called Zim dollars or Zollars.

It’s these Zim dollars whose value is now collapsing, while real US dollars have become as scarce as hens’ teeth. Today 361 Zim dollars buys you one US dollar. Tomorrow, who knows?

The government is quite right to say that this is a panic driven by hoarding and speculation – but people are behaving like that because they do not trust the government. Nor should they.

Robert Mugabe was not overthrown last year by a popular revolution. He was overthrown by his own corrupt and overbearing ZANU-PF Party, because he was planning to make his own wife Grace his successor. (Mugabe is 94 years old.)

It was Mugabe’s long-serving deputy Emmerson Mnangagwa who organised his cronies in the army (also controlled by ZANU-PF) to remove Mugabe from the presidency. Mnangagwa’s record of corruption and violence is impressive even by the ruling party’s standards, but he needed to create what looked like a new, cleaner government if the country was ever to escape from its dire poverty.

Zimbabwe was once a prosperous country. It still has ample resources and a relatively well-educated population, and if it could just inspire enough confidence in foreign investors and get control over its huge foreign debts it could start to climb out of the deep hole Mugabe left it in. But for that, it needs an honest, democratically credible government.

This is tricky, because a really free election would almost certainly have removed Mnangagwa and his ZANU-PF cronies from power. They were never going to accept that outcome, because it’s political power that makes them rich (by Zimbabwean standards). So the election had to look clean, but come out the right way.

Compared to all ZANU-PF’s other election victories, it was relatively clean: little intimidation or bribery of voters except in rural areas and little overt violence. But it was imperative that Mnangagwa win the presidency in the first round, when he faced a half-dozen rivals who split the opposition vote. For that, he needed to get over 50 percent of the votes in the first round.

He clearly didn’t get it, because the vote-counting (largely controlled by ZANU-PF appointees) took three days longer than expected. After the numbers had been thoroughly massaged, it was finally announced that Mnangagwa got 50.8 percent of the votes. Congratulations, Mr President!

Nobody believed it, and when opposition protests began in Harare, the police shot six of the protesters dead. That was all it took. The foreign institutions and companies that might have rescheduled Zimbabwe’s debt and invested in the country’s economy decided that it’s still the same old gang in power (as indeed it is), and turned their attention and their money elsewhere.

Three months later the Zimbabwean economy, which had been momentarily buoyed up by the hope of better times, is collapsing. In theory, this should usher in the second phase of democratisation in the country, with massive demonstrations driving ‘the crocodile’ (Mnangagwa) out of power.

In practice, that may not happen. Zimbabweans may be too cowed, or just too exhausted – and ZANU-PF would not go without a fight.
__________________________________
To shorten to 700 words, omit paragraphs 5 and 6. (“After…knows”)

Brazil: The Hard Right Wins Again

A man who makes Donald Trump look like a bleeding-heart liberal will almost certainly be Brazil’s next president. Jair Bolsonaro won 46 percent of the vote in Sunday’s first round of the Brazilian presidential election, with twelve other candidates running. Fernando Haddad, who will face him alone in the run-off in three weeks’ time, got only 29 percent.

Haddad, who leads the socialist Workers’ Party, will pick up most of the voters whose first-choice candidates have fallen by the wayside, but Bolsonaro needs only one in six of those votes to win the second round. Game over, in more ways than one.

Trump and Bolsonaro are populists cut from the same cloth. They both depend heavily on social media and on the support of evangelical Christians. They both oppose same-sex marriage, abortion, affirmative action for minorities, and drug liberalisation. But Trump’s views shift when it is to his political advantage – he once supported most of those policies – whereas Bolsonaro has always belonged to the hard right.

Trump is an instinctive authoritarian who chafes at the restrictions of the US constitution, but does not attack it directly. Bolsonaro praises the “glorious” period of the military dictatorship (1964-1985), which he served as an army officer, and claims that its only error was that “it tortured, but did not kill.” (It did, actually. At least 434 leftists were killed after being tortured.)

Trump is a racist, but he talks to his overwhelmingly white ‘base’ in dog-whistle code. Last year Bolsonaro said that the members of black rural settlements founded by the descendants of slaves “don’t do anything. I don’t think they’re even good for procreation any more.” No dog whistle there.

Trump pulled the US out of the climate change treaty, and Bolsonaro wants Brazil to do the same. But Bolsonaro also wants to privatise and ‘develop’ the entire Amazon: “Not one centimetre will be demarcated for indigenous reserves.”

Trump, like Bolsonaro, backs loose gun ownership laws. Both men want to bring the death penalty back (it never went away in some US states). Both men consider torture to be, as Bolsonaro puts it, a “legitimate practice.” But Bolsonaro also says that “a policeman who doesn’t kill isn’t a policeman.”

Trump is a sexist who was once caught boasting on tape about “grabbing pussy”, but mostly avoids such language in public. Bolsonaro told a woman member of Congress that “I’m not going to rape you, because you’re very ugly.” He believes that women should not get the same salaries as men because they get pregnant, and said that he had a daughter in “a moment of weakness” after fathering four sons.

Trump is an undisciplined narcissist who claims to be a tough negotiator, but will generally roll over if you throw him a few concessions and let him declare a ‘victory’. (Consider the new North American free trade agreement, for example.) His famously short attention span disqualifies him as an aspiring dictator even if he were that way inclined.

Bolsonaro, however, is a serious man. He has made a former general, Hamilton Mourão, his running mate, and promises to fill his cabinet with other generals. In a recent video produced by Haddad, he can be seen arguing: “You won’t change anything in this country through voting…You’ll only change things by having a civil war and doing the work the military regime didn’t do. Killing 30,000….If a few innocent people die, that’s alright.”

Bolsonaro doesn’t talk like that now, for obvious reasons, but there is no reason to believe that he has changed his mind. Brazil’s 200 million people may be in for some nasty surprises – and beyond the country’s borders Bolsonaro’s presidency will encourage neo-fascists and would-be military dictators in other Latin American countries.

That’s the real concern, and it extends to other continents too. The wave of non-violent revolutions that spread democracy to every part of the world (including Brazil) in the past few decades seems to have gone into reverse.

In some countries, like Thailand and Egypt, the generals are openly back in power. In others, like Turkey, Hungary, and the Philippines, ‘illiberal democracies’ run by strongmen have replaced the genuine article. Even in long established democracies like the United States, the United Kingdom and Italy the nationalists and populists dominate the political scene.

There are some counter-currents, of course. Mexico, the other Latin American giant, is getting its first ever left-wing government this year. Hard right challenges to the established democratic order have been fended off in France, Germany and the Netherlands. But the tide is running strongly in the other direction.

How bad will it get, and how long will it stay bad? Quite bad and for quite a while, one suspects. The world is not yet heading back towards big great-power war, but we are entering the last critical decade before climate change overwhelms us with a growing number of governments that are not only potentially violent but militantly ignorant.
____________________________
To shorten to 725 words, omit paragraphs 7 and 14. (“Trump…policeman”; and “There are…direction”)

Brazil: The Hard Right Wins Again

A man who makes Donald Trump look like a bleeding-heart liberal will almost certainly be Brazil’s next president. Jair Bolsonaro won 46 percent of the vote in Sunday’s first round of the Brazilian presidential election, with twelve other candidates running. Fernando Haddad, who will face him alone in the run-off in three weeks’ time, got only 29 percent.

Haddad, who leads the socialist Workers’ Party, will pick up most of the voters whose first-choice candidates have fallen by the wayside, but Bolsonaro needs only one in six of those votes to win the second round. Game over, in more ways than one.

Trump and Bolsonaro are populists cut from the same cloth. They both depend heavily on social media and on the support of evangelical Christians. They both oppose same-sex marriage, abortion, affirmative action for minorities, and drug liberalisation. But Trump’s views shift when it is to his political advantage – he once supported most of those policies – whereas Bolsonaro has always belonged to the hard right.

Trump is an instinctive authoritarian who chafes at the restrictions of the US constitution, but does not attack it directly. Bolsonaro praises the “glorious” period of the military dictatorship (1964-1985), which he served as an army officer, and claims that its only error was that “it tortured, but did not kill.” (It did, actually. At least 434 leftists were killed after being tortured.)

Trump is a racist, but he talks to his overwhelmingly white ‘base’ in dog-whistle code. Last year Bolsonaro said that the members of black rural settlements founded by the descendants of slaves “don’t do anything. I don’t think they’re even good for procreation any more.” No dog whistle there.

Trump pulled the US out of the climate change treaty, and Bolsonaro wants Brazil to do the same. But Bolsonaro also wants to privatise and ‘develop’ the entire Amazon: “Not one centimetre will be demarcated for indigenous reserves.”

Trump, like Bolsonaro, backs loose gun ownership laws. Both men want to bring the death penalty back (it never went away in some US states). Both men consider torture to be, as Bolsonaro puts it, a “legitimate practice.” But Bolsonaro also says that “a policeman who doesn’t kill isn’t a policeman.”

Trump is a sexist who was once caught boasting on tape about “grabbing pussy”, but mostly avoids such language in public. Bolsonaro told a woman member of Congress that “I’m not going to rape you, because you’re very ugly.” He believes that women should not get the same salaries as men because they get pregnant, and said that he had a daughter in “a moment of weakness” after fathering four sons.

Trump is an undisciplined narcissist who claims to be a tough negotiator, but will generally roll over if you throw him a few concessions and let him declare a ‘victory’. (Consider the new North American free trade agreement, for example.) His famously short attention span disqualifies him as an aspiring dictator even if he were that way inclined.

Bolsonaro, however, is a serious man. He has made a former general, Hamilton Mourão, his running mate, and promises to fill his cabinet with other generals. In a recent video produced by Haddad, he can be seen arguing: “You won’t change anything in this country through voting…You’ll only change things by having a civil war and doing the work the military regime didn’t do. Killing 30,000….If a few innocent people die, that’s alright.”

Bolsonaro doesn’t talk like that now, for obvious reasons, but there is no reason to believe that he has changed his mind. Brazil’s 200 million people may be in for some nasty surprises – and beyond the country’s borders Bolsonaro’s presidency will encourage neo-fascists and would-be military dictators in other Latin American countries.

That’s the real concern, and it extends to other continents too. The wave of non-violent revolutions that spread democracy to every part of the world (including Brazil) in the past few decades seems to have gone into reverse.

In some countries, like Thailand and Egypt, the generals are openly back in power. In others, like Turkey, Hungary, and the Philippines, ‘illiberal democracies’ run by strongmen have replaced the genuine article. Even in long established democracies like the United States, the United Kingdom and Italy the nationalists and populists dominate the political scene.

There are some counter-currents, of course. Mexico, the other Latin American giant, is getting its first ever left-wing government this year. Hard right challenges to the established democratic order have been fended off in France, Germany and the Netherlands. But the tide is running strongly in the other direction.

How bad will it get, and how long will it stay bad? Quite bad and for quite a while, one suspects. The world is not yet heading back towards big great-power war, but we are entering the last critical decade before climate change overwhelms us with a growing number of governments that are not only potentially violent but militantly ignorant.
____________________________
To shorten to 725 words, omit paragraphs 7 and 14. (“Trump…policeman”; and “There are…direction”)

A Second Great Recession?

Ten years ago this month the financial services firm Lehman Brothers filed for bankruptcy protection, triggering the 2008 Crash and the subsequent Great Recession from which the world’s economies have still not fully recovered. Will we look back on this month as the turning point when Donald Trump’s trade war with China unleashed the Second Great Recession?

In the past week the slow dribble of tariffs and counter-tariffs has rapidly grown into a full-fledged confrontation between the world’s two greatest economic powers.

In July the US imposed tariffs on $34 billion worth of Chinese exports to the United States, extending them to another $16 billion of Chinese goods in August. China responded cautiously, announcing roughly comparable tariffs on $50 billion of US exports to China in August.

Trump deemed that unfair, and on Monday he slapped a 10 percent tariff on another $200 billion of Chinese exports to the US, due to go into effect at the end of this week. He warned that if China retaliated again, he would impose a similar tariff on all the rest of China’s exports, another $267 billion.

Trump also threatened to raise the rate of the tariff to 25 percent if there is no US-Chinese deal that meets US requirements by the end of the year. Did he imagine that this threat would force an autocratic regime like China’s to back down and lose face? Who knows?

The Chinese replied hard and fast, announcing on Tuesday a new tariff on all the rest of America’s exports to China, worth some $60 billion. So if Trump fulfills his threat and hits the remaining $267 billion of Chinese exports as well, by next Sunday ALL America’s imports from China and ALL China’s imports from the United States will be paying tariffs.

China, trying to lower the temperature, is keeping its tariffs on US goods down to 5 percent for the moment, but it can’t hold that line forever if the US goes on ratcheting up the ones it has imposed on China. Trump has got the trade war he was clearly itching for, and it’s a much bigger deal than his spat with the European Union or his bullying of Canada.

We’re still not talking about cataclysms here: China’s trade to the US accounts for less than a quarter of its total exports, and its exporters will still get paid for what they sell. (It’s the importer who pays the tariffs.) The same goes for US exports to China, which are only one-sixth of total American exports.

In the long run higher prices for Chinese goods in the US might damage its market share there, with negative effects on employment in China, but that’s a slow process. The same applies to potential US job losses due to declining exports to China: they won’t happen fast enough to have any impact on November’s mid-term elections in the United States.

It’s the long term that counts, and this trade war will probably not be settled for a long time. Multi-billionaire Chinese businessman Jack Ma predicts that it could last 20 years, which sounds a bit pessimistic, but as long as it lasts, it will poison relations between the world’s two greatest powers.

Trump seems to think that China’s economy is now so wobbly that the tariffs will push it over the edge, forcing it to come to the US begging for mercy. It’s true that the Chinese economy is growing very slowly, if at all: nobody believes the official figure of six or seven percent annual growth. It’s also true that the Chinese financial system is as overloaded with bad debts as American banks were in 2008.

But China is only a sham capitalist economy. If lost exports to the US trigger a financial collapse in China – an unlikely but imaginable outcome – Beijing would slam the doors closed on international capital flows, bail out the Chinese banks, and flood the domestic economy with cheap credit. In this scenario, it’s international trade that would collapse, which wouldn’t be in anybody’s interest.

Meanwhile, Xi’s regime would be stoking Chinese nationalism and blaming the United States for all the domestic misery. Indeed, Xi and the Communist Party hierarchy are coming to the conclusion that Trump’s trade war is designed to “thwart China’s rise.” There can be no compromise with the United States if that is the case.

That’s not just Chinese paranoia. There really are those around Trump (and elsewhere in Washington) who are encouraging his obsession with the American trade deficit with China for exactly that reason. Yet his obsession is completely misplaced: 85 percent of the seven million American manufacturing jobs lost since 2000 were eliminated by automation, not by trade.

This nonsense is going to go on for a long time, and everybody will end up at least slightly poorer, but it probably won’t bring on the Second Great Recession. It may, however, start the Second Cold War.
__________________________________
To shorten to 700 words, omit paragraphs 8 and 9. (“We’re…States”)