A new political ‘dawn’ in Australia

S P SETH

Over the years, particularly after 9/11 terrorist attacks in the US, western democracies have reacted quite strongly to a surge of refugees from countries afflicted by civil wars, insurgencies and political persecution. This has led to a strong shift to the political right in these countries, even in liberal democracies like Norway, Sweden and Denmark. We are already familiar with its political impact in countries like UK, France and much of the European Union.

The recent elections in Australia, a country with western political traditions, though geographically closer to Asia, have shown that hostility to asylum seekers is even more pronounced here than in any other developed country. This was probably the single most important issue accounting for the conservative coalition’s electoral victory in the recent elections, with the opposition leader Tony Abbot now becoming Prime Minister of Australia. The Liberal-National coalition incessantly attacked the Labor Party for failing to control the influx of boat people (as these refugees are called here), thus compromising the country’s border security.

It paraded its ‘successful’ handling of the asylum seekers’ issue by reducing the flow of boats reaching Australia under the previous conservative coalition, with John Howard as prime minister. The result was that, fearing electoral oblivion from the conservatives’ relentless attack on the Labor Party, they too went feral on the hapless boat people. But the Labor Party couldn’t compete with the original brand of the Liberal-National coalition for which they had a copyright, in a sense.  In voting for the conservative coalition, the Australian electorate opted for the original rather than the copy. It is, therefore, not surprising that the conservatives, led by Tony Abbot, has won the election defeating Labor Party government led by Kevin Rudd.

It is not just the politics of fear of the boat people that have contributed to the Labor’s defeat. Their disunity centred around the personalities of its two leaders, Kevin Rudd and Julia Gillard, only magnified its problems. Kevin Rudd’s removal as prime minister in a party room coup and his replacement by Julia Gillard created a poisonous atmosphere. Which, in turn, created conditions for another coup in the Labor Party this year to bring back Kevin Rudd as prime minister. He was supposed to reverse his party’s sinking fortunes. But that was not to be. During much of the six-year rule of the Labor Party, shared between Rudd and Gillard, the disunity and disfunctionality of the their party was a regular feature of news and commentary in the media here.

Against this backdrop, all the achievements of the Labor government, and they were quite impressive by any standard, never registered with the people. The Rudd government, for instance, was one of the first in any developed country to take a series of measures to stimulate the economy and to forestall a run on the banks by guaranteeing all bank deposits. And it worked.

Even with its hefty stimulation package, Australia’s debt to GDP ratio is one of the lowest in the developed world. It is one of the few countries with AAA credit rating from major rating agencies. Its unemployment rate of under 6 per cent is the envy of the developed countries. And its growth rate of 2.6 per cent is quite respectable in the current global economic situation. With low interest rates and inflation well under control, Australia is still the ‘lucky’ country.

There are, for sure, some hiccups on the way ahead with mining sector slowing, but there are no signs of a disaster ahead. This is on the economic front. Add to this the Labor government’s progressive social legislation like disability insurance and education reforms, the picture is even more impressive.

But, as is well known, disunity is death in politics and Labor has paid a heavy price for it. Because of its perennial infighting and disunity, it was unable to communicate and sell its credible and proud record. What people saw were Rudd and Gillard and their respective supporters undermining each other. Indeed, the early success of the Rudd government in combating approaching recession made it even more difficult to sell its message for the simple reason that people had no lasting memory of any financial crisis.  

With the Labor government unable to sell its message, the Abbott-led opposition was able to create the image of a crisis-ridden Australia under its incompetent Labor government. And the only way to deal with, so it was argued,  was to get rid of the Labor government.  The boat people’s (asylum seekers) arrival was touted as a proof that the Labor government had lost control of Australia’s borders. It is, of course, ridiculous to claim that refugees heading towards Australia presented a security problem. But the hysteria thus created stoked fear among many people that Australia was vulnerable to the hordes of refugees/economic migrants seeking their fortunes in this ‘lucky’ country. The Labor government tried hard to become as ruthless on the boat people, but the conservatives appeared more serious.

On other issues too, the opposition sought to ignite people’s innate insecurity. For instance, on the question of carbon tax that the Labor government had introduced to reduce carbon emissions as part of its climate control strategy, Tony Abbot attacked it with all the vehemence of a zealot, blaming it for all of Australia’s economic troubles and more. He had been a climate change denier, calling it ‘carp’ at one time.

The Labor government sought to counter such attacks with facts and figures, but it didn’t work. The negative message of the opposition was proving more successful than any positive rebuttal from the government. Tony Abbot, as opposition leader, kept urging people to vote out this incompetent Labor government and replace it with the conservative coalition to fix up the country. And it resonated increasingly

While the conservative opposition was at it attacking the government on boat people and carbon tax, it was also highlighting the country’s fiscal crisis. It was untrue but that didn’t prevent Tony Abbot from talking down the country’s economy, as it dovetailed with his political message of: get rid of this incompetent government. And it worked.

While the battered Labor Party licks its wounds, the conservative Liberal-National coalition government, with Tony Abbot as Prime Minister, will be enjoying a political honeymoon for a period, until it starts backtracking on all the undeliverable promises. 

Contact: sushilpseth@yahoo.com.au 

  

Japan: back to the future

S P SETH

Japan is back to the future, with the country’s longest ruling Liberal Democratic Party (LDP), after brief interruptions, now in control of both houses of its parliament. Last year, Shinto Abe’s LDP won the elections to the country’s House of Representatives that made him Japan’s prime minister, defeating the Democratic Party of Japan  (DPJ) that had held power from 2009-12 with great expectations of a new political dawn in Japan. Even though LDP came to power last year, it still was politically hobbled, as it didn’t control the Upper House. This year, they also won control of the upper house of the parliament. With popular political mandate in both houses of parliament, Prime Minister Abe will have greater freedom to push forward his political agenda.

There are two areas, both of great significance for the country, that Abe has promised to overhaul and energize. The first is Japan’s economy that has been sluggish ever since Japan’s economic bubble burst in the nineties. And the second is to make Japan into a ‘normal’ country, with a regular armed force. That will require an amendment to the country’s US-imposed constitution, after Japan’s defeat in WW11. Article 9 of the constitution outlaws war as a means of settling international disputes and prohibits Japan from maintaining armed forces with potential to wage war; though, in effect, Japan has an armed force, called Self-Defence Forces. To put it differently, these forces are not meant to wage a war but to act in self-defence.

Both issues, the economy and defence, are important but it is the state of the economy that needs urgent attention. For the last two decades, Japan’s economy is in a stagnant state weighed down by deflation. People are simply not spending more than is necessary for their living. Business investment is lagging and confidence is a rare commodity. Japan has already lost its place as the world’s second largest economy to China. There was a time in the eighties when there was incessant talk that Japan might overtake the United States as the world’s number one economic power. Indeed, some Japanese were so cocky that they were even starting to lecture the United States about economic fundamentals. The relations between the United States and Japan were strained at times because the latter was running large trade surplus with the US. And then the bubble burst with the Japanese stock market diving and   real estate market collapsing. Japan’s economy hasn’t really recovered after that, especially the loss of confidence of its people.

Prime Minister Abe has ambitious plans to change all that, with measures already in place. The economy is being energized at two levels. First, Japan’s already soft monetary policy, with almost zero interest rate, is being further liberalized with more money pumped into the economy by the country’s central bank. At another level, the government is stimulating the economy with a spending program. This has already energized its stock market and there is a palpable increase in the confidence barometer. After all the gloom of the lost couple of decades, there is a sense that Prime Minister Abe is determined to give the economy a real push. And the businesses are excited. It is probably this feel good factor that is behind the economic excitement.

Otherwise, the consumers still remain cautious and there is not much happening on the ground that would suggest a medium or long-term trend to economic revival. Prime Minister Abe’s government seems to believe that the revival of confidence, with more money into the system and greater public spending, might do the trick. It might, in the short term, but whether the markets will buy the confidence trick for the medium or long term is another matter. There are also suggestions that structural reform of the economy in terms of labour market flexibility (of hiring and firing workers) and opening Japan’s economy to foreign competition, in the agriculture sector, for instance, will give it a much-needed boost.

These are sometimes remedies from self-serving outside interests that might not be practicing what they preach at home. For instance, the US wants the Japanese agricultural market to be opened up for their exports, with Japan constrained by its farmers’ lobby. By the same token though, the US spends fair bit on subsidies for its own agricultural sector.

The prescription for Japan is to deregulate its economy to make it more competitive. But a similar open-ended deregulation elsewhere in the world brought about the current global financial crisis, making governments the handmaiden of banks, financial institutions and stock markets. Which makes democracy, at times, look like corporate governance.

After its earlier boom and bust cycle, Japan’s new economic policy, called Abenomics, unless handled cautiously, might do more damage than good in the medium and long term. For instance, Japan already has public debt that is over 200 per cent of its GDP. The saving grace for Japan, compared to many other debt-ridden countries, is that most of this debt is internally raised and hence Japan is not hostage to foreign interests. However, to further increase this debt through an expansionary policy is not without risks, even though it has excited the business sector.

Another problem facing Japan arises from its maritime dispute with China over the sovereignty of some uninhabited islets, which Japanese call Senkaku and Chinese call them Diayoyu. The waters surrounding these rocks are said to be rich in oil, gas and fishery, and both countries are determined to push their claims. The Sino-Japanese islands’ dispute has at times bordered on a military confrontation. With China’s military power growing, and Japan feeling increasingly threatened, Prime Minister Shinto Abe’s government is seeking to deal with it at a number of levels.

First, Japan is increasing its defense budget. Second, it would like to amend Article 9 of the constitution to ease or remove constraints on its defence forces from a self-defence role to be able to confront an enemy force on its own, if necessary. Three, Japan has further strengthened its security alliance with the United States.

At the same time, Japan’s nationalist Prime Minister Abe is also engaged on a nationalist revival in the country to imbue its citizens with greater national pride and dignity. Prime Minister Abe has been unapologetic about his visits to the Yasukuni shrine memorial to its war dead—this year, though, he didn’t go personally--including some of the WW11 war criminals. And he also has a different take on Japan’s WW11 atrocities, tending to whitewash or dismiss them.

Such nationalist revival doesn’t go well in China, South Korea and some other regional countries. Indeed, sometimes, it is patently offensive when, for instance, Japan’s finance minister, Taro Aso, suggested that Japan should emulate Nazi Germany, which rewrote Germany’s constitution to overcome constraints on its armed forces.  Aso has since retracted his comments, saying that it was taken out of context.

While Abe is seeking to revive Japan’s economy, any patriotic revival re-kindling Japan’s wartime memories is likely to do more harm than good to Japan’s economy.

 Note: This article was first published in the Daily Times.

Contact: sushilpseth@yahoo.com.au