A number of leaders around the world are on the ropes right now. That's not necessarily a bad thing.
- By Annie LowreyAnnie Lowrey is assistant editor at FP.
The leader: President Mikheil Saakashvili
Why he’s got to go: Economic and foreign-policy incompetence. Russia might have started the war, and the global economy might be rocky, but Saakashvili’s policies haven’t helped.
The story: Georgia has deposed every one of its leaders since it gained independence from the Soviet Union in 1991. Saakashvili, who came into power in the 2003 peaceful “Rose Revolution” and won an open election in January 2008, may be next.
The Georgian economy grew rapidly between 2004 and 2007 — between the end of the country’s political strife and the beginning of the global economic crisis. But much of Georgia’s new wealth relied on foreign direct investment, which has dropped steeply, and little of it trickled down past the country’s elites.
The August 2008 war — in which Russia sent troops deep into Georgia after Tbilisi tried to retake control of the separatist South Ossetia region — did not help matters. It destroyed already tense relations with one of Georgia’s largest trading partners and slashed direct foreign investment more than 50 percent. This left the country even more exposed to the continued and accelerated global downturn because Georgia requires more than $4 billion in support from foreign governments and organizations to stay afloat. Saakashvili himself called the current situation “a major existential struggle.”
Saakashvili’s response to the latest crisis — the 20,000-person protests that have shut down Tbilisi for a week — has been to point the finger at the Kremlin. But, even if Russia is funding the protesters, Saakashvili should focus on addressing their core complaints: corruption, lack of accountability, and politically motivated prosecutions that have targeted some of Saakashvili’s opponents.
His one saving grace? The opposition candidates don’t look much better.
The leader: Prime Minister Abhisit Vejjajiva
Why he’s got to go: Politicking when he should be governing. Aiding the poor through the downturn should be a bigger priority than scrapping with rivals.
The story: Thailand has been in a state of political turmoil since 2006, when a military coup ousted then Prime Minister Thaksin Shinawatra. Ever since, Thaksin, a wealthy businessman with strongly populist tendencies, has continued to broadcast potent political messages to his supporters in the country.
For the past month or so, up to 100,000 “red shirt” protesters who support Thaksin have rallied against Abhisit and periodically forced Bangkok to shut down. This month, protesters forced the government to call off a summit of leaders from the ASEAN trade bloc — a tremendous embarrassment for Abhisit — and provoked a military response that left two dead.
In all likelihood, Thaksin’s Keynesian economic policies would benefit Thailand more than Abhisit’s. But regardless of which man seizes power, one thing is certain: Their perpetual infighting has severely harmed the country. An Asian Development Bank economist said political turmoil may cause the economy to contract 5 percent this year, revising his estimate from 2 percent. If neither of the two men can gain control and provide peace, at least they should find a way to protect the Thai economy instead of driving away foreign investment, tourism, and assistance.
The leader: Prime Minister Pushpa Kamal Dahal, known as Prachanda
Why he’s got to go: For failing to bring political or economic stabilization
The story: For the past three years, royalists and Maoists in Nepal have engaged in a peace process, following the ouster of the country’s 240-year-old monarchy after a long and bloody guerrilla war. With a coalition government and new populist policies, the country has faced an unprecedented political reconciliation challenge. The hardest part for Nepal has been integrating its nearly 23,000 Maoist fighters into the Army, once the strong arm of royal power, and creating a productive legislative body.
The two rival sides have found it difficult to work together. The remaining royalists have balked at many of the populist proposals of the coalition government’s Maoist leader, Prachanda. And by moving to the center and making necessary political changes, Prachanda risks alienating his partisans. For instance, a rule about how minorities will be proportionally represented in Parliament caused a series of ethnic flare-ups. Far-left protests have started to occur in the countryside, threatening the tenuous political process.
It doesn’t augur well for the country. Any political problems will necessarily compound its extraordinarily weak economic situation, just as economic problems may spur political dissent. According to one economist at the Asian Development Bank, “The country is already facing the grave challenge of sustaining the growth and the poverty-reduction gains of the past decade.” This means Prachanda must maintain political stability and avoid any violence at all costs — or Nepal risks catastrophe.
The leader: Prime Minister Vladimir Putin
Why he’s got to go: Despite his popularity, he’s to blame for failing to enact economic policies that would have aided Russia through the financial crisis. And he isn’t helping now.
The story: Russia benefited richly from the global rise in stock and commodity prices during Putin’s presidency. Between 2000 and 2007, the country’s GDP more than tripled. Putin became enormously popular, enacting some social reforms and setting up a rainy-day fund. He also used the economic good times to consolidate wealth in the hands of a small cadre of Russian elites. And economic growth justified Putin’s authoritarian control over the country and punishment of dissenters.
But since kingmaker Putin ushered Dmitry Medvedev into the presidency in 2008, the political and economic situation has looked much bleaker. Putin used the growth period to bolster Russia’s oil, commodity, and gas companies to an all-important status, calling conglomerate Gazprom “one of the backbones of our economic growth” in 2004. But he did not encourage the diversification of Russia’s wealth base. Commodity prices rely on global demand, which has fallen precipitously during the Great Recession, leaving Russia’s economy needing oxygen.
Indeed, the country is hard hit. Stock prices are down more than 50 percent, and debt delinquency has skyrocketed. Unemployment is up. Growth was scratch in 2008, and the economy will contract in 2009. The ruble’s in trouble. Yet Putin takes no blame and has retained a great degree of control. Without the accompanying prosperity, Putin’s case for maintaining tight control over the country’s “managed democracy” is much weaker.
Medvedev seems more amenable to new policies and has a stronger background in economics. This should, ideally, mean the end of Putin.
The leader: Chancellor Angela Merkel
Why she’s got to go: For naysaying other countries’ policies under the banner of economic responsibility
The story: Throughout most of the 2000s, Germany’s export-based economy fared well. But with global demand weak, slowdowns in the industrial market, and woes in its banking sector, Germany succumbed to the Great Recession. Its economy is due to contract about 5 percent this year.
Merkel’s administration — especially Merkel herself — has governed conservatively and prudently in domestic affairs. In foreign policy, she has been a mixed bag. Her government has pointed fingers and naysayed other countries’ economic policies, spurring a chilly response from leaders of the United States, Britain, France, and Japan, among others.
In September, Finance Minister Peer Steinbrück accused the United States of precipitating the crisis, “spreading worldwide like a poisonous oil spill.” Merkel responded to the United States’ and Britain’s stimulus packages by saying she would not join a “pointless race” to spend, though she ultimately had to put forth a 50 billion euro Keynesian package.
In a New York Times interview, Merkel explained Germany’s hesitance to stimulus as stemming from a caution against inflation due to its aging population (Germany’s demographics mean it will have fewer workers to repay the funds down the road). The response met with a shrug from the international community; Germany could simply take in more immigrants, as the United States does.
Ultimately, Merkel has been a federalist when the world needs internationalists. Taking a more proactive role in stimulating demand and buoying the G-20 economies would be worth it — for Germany, the euro area, and the world.