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Asia politics: Asia in 2006
(EIU Viewswire)COUNTRY BRIEFING
FROM THE ECONOMIST INTELLIGENCE UNIT
Politicians across Asia will be happy that the electoral calendar in 2006 looks relatively clear. In most of Asia's major democratic countries governments will be able, for the most part, to focus on policymaking unencumbered by the need to curry favour with their electorates. In the non-democratic states covered here, challenges to official authority are unlikely to loosen the regimes' grip on power. But that does not mean Asian domestic politics in 2006 will be uneventful.
Currently only one of the 16 Asian nations covered by the Economist Intelligence Unit's Country Forecast service, Japan, is almost certain to have a new leader by the end of the year, although it is a safe bet that it will not have a new government. Upheavals are always possible in a number of other nationsthe president of the Philippines, for example, is far from secure, while unstable governments in New Zealand and Sri Lanka might also fail to last 12 monthsand even those facing the longest odds to be deposed, such as the Chinese Communist Party (CCP), will continue to face domestic challenges to their authority of varying severity. But barring unforeseen calamities, in 2006 political developments in many Asian countries will be shaped by preparations for 2007, throughout which several potentially destabilising events are scattered.
North Asia
Where does this leave individual countries? China does not have to worry about national elections, but its president, Hu Jintao, must nonetheless consider his own status while seeking to preserve CCP authority throughout the country. In March 2006, at the National People's Congress, Mr Hu is likely to continue the promotion of his allies to positions of seniority, to shore up his own position within the party and to prepare the ground for his eventual successor. A key event the following year will be the 17th Party Congress, at which Mr Hu's tenure is likely to be extended for another five years. By then he is likely to have given clear indications about who will take over the reins in 2012.
In 2006 social unrest will continue to be one of the biggest threats to political stability in China. Among the most prominent problems are sharp income disparities (especially between urban and rural areas), poor safety conditions in workplaces, weak protection of property rights, and corruption. In part to address these problem, and to preserve its own grip on power, the CCP will continue to promote the development of a "harmonious society", targeting economic policy at the poorest sections of the population. Measures have been implemented to introduce more transparency into decision-making processes and to make leaders more responsive to the demands of ordinary people, and an ongoing educational campaign within the CCP aims to improve standards of behaviour among party officials. However, there is a risk that local authorities may be unwilling to implement central policy, hindering the effectiveness of these efforts. Protests are in any case likely to continue in rural areas and among the economically dispossessed.
The CCP might also face further challenges to its authority next year from Hong Kong, where democratic politicians and the public are getting bolder in their demands for Beijing to announce a timetable for the introduction of universal suffrage. But at least there will be some breathing space for cross-Strait relations, as 2006 will be a rare election-free year in Taiwan (where the president, Chen-Shui bian, usually ratchets up his anti-China rhetoric to drum up support before key votes). Nevertheless, disputes over the direction of cross-Strait policy between Taiwan's ruling Democratic Progressive Party and the opposition Nationalistsbuoyed by a recent local-election victorywill ensure that its domestic political scene remains tense. Partisan politics will dominate in 2007, as campaigning starts ahead of the elections for the Legislative Yuan (parliament) that are scheduled to take place at the end of that year. This is likely to be even more rancorous than usual, as the number of seats in the legislature will be slashed at this vote from 225 to 113.
Japan is all but certain to finish 2006 with a new prime minister, although the landslide victory of the ruling Liberal Democratic Party (LDP) in a general election last September means its grip on power is only likely to tighten over the next twelve monthsespecially as the main opposition Democratic Party of Japan is struggling to regroup after its heavy defeat. Japan's prime minister, Junichiro Koizumi, is so popular that he could conceivably persuade the LDP to grant him an exemption from its term-limit rule, which requires him to step down as party president in September 2006. However, as he has consistently disavowed a desire to remain in office beyond that date, the debate now centres on the question of who will succeed him.
A cabinet reshuffle in late October was important in this regard, as the prime minister used it to put the three leading candidates in key positions in anticipation of the campaign to replace him. The current favourite, Shinzo Abe, was appointed chief cabinet secretary. Taro Aso, who helped to steer postal privatisation through parliament, was rewarded with the foreign affairs portfolio. Sadakazu Tanigaki, meanwhile, was retained as finance minister. We maintain our view that Mr Abe will probably be elected to replace Mr Koizumi as party leader, and hence as prime minister, in 2006. This will, however, depend on Mr Abe's ability to maintain his considerable popularity among the publiche leads the field by a long way in terms of who voters would most like to see succeeding Mr Koizumi. Mr Aso is disadvantaged by his limited public appeal, particularly among female voters, and Mr Tanigaki may have damaged his chances by conspicuous foot-dragging over Mr Koizumi's push to reform Japan's public-sector financial institutions.
In South Korea, political risk will remain high in 2006, as the country experiences its traditional bout of party realignments in the run-up to the presidential election the following year. One area of concern centres on the state of the ruling Uri Party. As expected, the party fared badly in by-elections in October, losing all four of the polls to the opposition Grand National Party (GNP). Uri's rising unpopularity is helping to weaken further its already fragile unityopinion polls suggest that Uri only has around 20% support, compared with around 40% for the GNP. The local elections that will be held in May 2006 could further weaken the party if, as currently looks likely, it fares badly
Uri's relationship to the president, Roh Moo-hyun, is proving particularly divisive, with an increasing number of Uri members of parliament now seeking to distance themselves from the president, whom they blame for the party's election losses. This breakdown in party unity will have an adverse impact on Uri's ability to implement policy, particularly on controversial issues, through 2006, auguring ill for the government's overall political effectiveness. There is a high likelihood that the party will split before the 2007 presidential election. Meanwhile, as was the case with his two predecessors, Kim Dae-jung and Kim Young-sam, Roh Moo-hyun will increasingly become a lame-duck president as his term in office draws to a close.
South-east Asia
Indonesia's president, Susilo Bambang Yudhoyono, will be hoping 2006 is kinder to his country than 2005 was: he has had to deal with the aftermath of the end-2004 tsunami disaster, outbreaks of bird flu and polio, another terrorist attack in Bali and escalating global oil prices. However, he has had successes (notably in Aceh) and his personal popularity remains highat over 50% according to the most reliable national surveydespite a massive rise in fuel prices and escalating inflation and interest rates. This bodes well for political stability in the country in 2006, while a recent cabinet reshuffle might boost the government's effectiveness with regards to economic reform. Although Mr Yudhoyono has suffered from a lack of political support in an obstructionist legislature, as opposition parties are now mired in internal disputes he should be able to continue to strengthen his position through 2006.
Malaysia's political scene will remain superficially stable in 2006, although there is rumbling dissatisfaction within the United Malays National Organisation (UMNOthe dominant party in the Barisan Nasional ruling coalition), with the prime minister, Abdullah Badawi. As Mr Abdullah does not face another party congress until 2007 and a general election is not required until April 2009, our central assumption is that Mr Abdullah will remain in power through 2006 and 2007, but that the weakness of his power base within UMNO could facilitate an internal challenge. This could be prompted by, for example, his anti-corruption drive. Mr Abdullah's handling of Anwar Ibrahim, the former deputy prime minister who was released from prison in late 2004 after his controversial conviction for sodomy was overturned, could also cause him difficulties within his party next year.
Political stability can never be guaranteed anywhere (apart from Singapore, perhaps), but it never seems likely in the Philippines. In 2006 the president, Gloria Macapagal Arroyo, is almost certain to face further challenges to her authority. The next few months will be particularly difficult for the government as a number of taxation changes are in the pipeline, and rumours of coup plots are likely to continue to circulate. Congress has begun to discuss constitutional reform: pressure on Ms Macapagal Arroyo to curtail her presidency as the price for a deal on this reform may continue. Later in 2006 political jostling will resume as parties prepare for the mid-2007 congressional election. Although the administration continues to insist that it will remain in power until 2010, political instability and a loss of key supporters could yet see the congressional elections accompanied by a presidential election, or, if a deal on constitutional reform is reached, replaced by election to a single-chamber parliament.
Singapore is likely to hold a parliamentary election in 2006 but the chance of a change of government, or any noteworthy political instability, is close to zero. The prime minister and leader of the People's Action Party (PAP) government, Lee Hsien Loong, is not obliged to call an election until 2007. However, he is expected to call one by early 2006 in order to secure a personal mandate. The result is not in doubt, as the main opposition parties remain weak and fragmented, but the proportion of the vote that the PAP wins will provide an indication of Mr Lee's popularity. A low voter turnout could result in PAP politicians pushing for a faster pace of political liberalisation, but continuity and stability will remain highly valued.
In Thailand, the Thai Rak Thai (TRT) government will remain firmly in control through 2006, as it will continue to enjoy an unprecedented majority in the lower house of parliament. However, the prime minister and TRT leader, Thaksin Shinawatra, is struggling to maintain his popularity, not only among the electorate but also within his own party. Part of Thaksin's problem has been his failure to resolve the ongoing violence in southern Thailand, despite the government's uncompromising approach to the conflict. This conflict could worsen in 2006 either if the insurgency attracts foreign Muslim militants or if it spreads to other parts of the country, such as the major tourist destinations or the capital.
Vietnam's Communist Party will remain firmly in control in 2006, but the party's leaders will face a number of challenges, most notably that of tackling the pervasive nature of official corruption. The party will hold its tenth congress in the second quarter of 2006, during which there will be the traditional round of personnel changes. It is likely that the general secretary, Nong Duc Manh, will be called upon to serve another five-year term. Mr Manh has been fairly successful in maintaining party stability, while promoting a strong stand against corruption. If he is replaced, it is unlikely that his successor will seek to transform the party in a major way. Indeed, the party's central tenets will remain unchanged during the foreseeable future, and its leadership remains determined to maintain the party's dominance over the polity. Despite the party's willingness to accept greater political debate in the legislature, the party will continue to eschew meaningful political reform.
South Asia
In India, although it faces a number of threats, the United Progressive Alliance (UPA) coalition is likely to remain in power through 2006. Tensions between Congress (which leads the UPA), its coalition allies and the mainly communist Left Front parties that support the coalition will produce a volatile political situation that will test the skills of the prime minister, Manmohan Singh. Recent state elections in Bihar have strengthened the hand of the opposition at the state level and increased their confidence at the centre. The outcome of further state elections in 2006, in particular in the Left Front strongholds of West Bengal and Kerala, will play a significant role in determining the health of intra-coalition relations at the federal level.
The president of Pakistan, Pervez Musharraf, can never rest easy given his narrow escape from two assassination attempts, in late 2003 and 2004. But assuming his luck holds, we expect General Musharraf to remain president and chief of army staff in 2006 and beyond. In his capacity as army chief, General Musharraf will be able to rely on the continued loyalty of the army, which has prospered under his rulethe army remains Pakistan's most influential institution and General Musharraf's ultimate guarantor of power. He also has the support of a majority in parliament and of a loyal prime minister, Shaukat Aziz. Pakistan is scheduled to hold parliamentary elections by October 2007, and an electoral college is due to choose a president in the same year. With his grip on power remaining strong, General Musharraf's supporters in parliament are likely to be re-elected and he is likely to win the 2007 presidential election.
Of the countries covered in this overview, Sri Lanka faces perhaps the biggest risk of serious instability in 2006 through violent insurgencyin this case, if a four-year-old ceasefire between the government and the Liberation Tigers of Tamil Eelam (LTTE) collapses and the country returns to civil war. The victory of Mahinda Rajapakse in the November presidential election increased substantially the risk of a sharp deterioration in Sri Lanka's political environment. Thanks to a series of pre-election pacts with hardline nationalist parties, Mr Rajapakse has agreed to a number of conditions that contradict the declared policies of his own party and require a retreat from the currently agreed outlines of plans to devolve power as part of a solution to the country's ethnic conflict.
In 2006 Mr Rajapakse will therefore be forced to make some hard choices. He could renege on his undertakings to his electoral allies in order to appease the Tigers, courting civic unrest and instability in the south, the stronghold of these hardline parties. Alternatively, he could attempt to alter the approach to political and economic reform that has been followed for the past five years, which would satisfy his allies but would risk precipitating the LTTE's withdrawal from the ceasefire. Consequently, the possibility of a return to war will remain a concern throughout the next year. Disruption and tension can also be expected if Mr Rajapakse decides to use the momentum of his election victory to dissolve parliament and hold a general election.
Australasia
In Australia, the ruling centre-right Liberal-National coalition, led by the prime minister, John Howard, is anxious to push through the more controversial aspects of its legislative agenda early in its historic fourth term. These include widely unpopular reforms to the country's labour laws. Meanwhile, attempts by the National Party to extract benefits for its rural constituents in return for supporting what is essentially a Liberal agenda are likely to fuel existing tensions between the two parties.
Speculation as to whether or when the 66-year-old prime minister might hand the leadership to his ambitious and long-serving deputy, the treasurer, Peter Costello, will continue next year. Any handover will need to occur not much later than mid-2006 if Mr Costello is to have sufficient time to settle into the role before the next federal election, which is likely to take place in 2007 (although it is not formally due until early 2008). Mr Costello, who is speaking on issues outside his portfolio with increasing frequency, has refused to rule out a leadership challenge if it becomes clear that Mr Howard intends to stay on to fight the next election. However, support for Mr Howard within the Liberal Party remains strong, and he outperforms Mr Costello in opinion polls by a considerable margin.
Finally, the government of New Zealand should in theory be at its most secure, following a general election in September. But the very narrow margin of victory in this election by the Labour partywhich lacks an outright majority in parliamentmeant a patchwork coalition of diverse political interests had to be assembled. The new government is therefore likely to be the most fragile and least effective for many years, and it may struggle to last the full three-year term. The prime minister, Helen Clark, had to make policy concessions to two centre-right parties to secure their supportat the same time alienating Labour's traditional allies. The job of keeping the coalition together through 2006 will be made all the more difficult by fierce opposition from the opposition National Party, which has been reinvigorated following its strong performance at the election.
SOURCE: ViewsWire Asia
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